85% of Americans don’t bother to think about their credit score unless they are planning to apply for a loan or credit card. There are even a few who would never have checked their credit scores at all. Obviously, it’s not those fancy numbers that attract you like your checking account, savings account or credit card balance. So, when was the last time you checked your credit score?
Many people are even in the myth that if you check your credit score then it might affect your credit. And the last category of people is afraid to check their score to avoid the unlikely outcome. However, if you check your credit score using a credit scoring service then your credit won’t be affected.
We share with you 7 reasons why you should check your credit score and how it would help you to take control over your financial situation and credit. But before that, you might want to know how often you should be checking it.
How often should you check your credit score?
Like you, the credit score may change daily based on the changes in your credit report. So, if you’re planning to apply for a car loan or home loan, then you will have to check your credit score more often(maybe 2 to 3 times a week or more) to track your credit score. Otherwise, you can check it somewhere between monthly to semi-annually.
7 reasons to Check your Credit Score:
#1. Reality check on where you stand financially
Your credit score reflects your overall financial health. So, to know where you stand financially and how your credit is (good or bad), you need to keep a track on your credit score.
It’s not the end of the world if your credit score is bad, you can look for ways to improve it. If it’s good, then you can always maintain it.
#2. Know the factors influencing your credit score
Once you start tracking your credit score, you will learn to differentiate between the impact caused by every decision you make. How opening a new credit, clearing debts or paying off balance influences your credit score. You can be prepared in advance before you apply for a major loan as you would know what steps to avoid from affecting your credit score.
#3. You have the control of your application outcome
Knowing your credit score can help you from getting denials or unfavorable outcome of an application. As you can work out on your credit score before you put in your application.
#4. Track the changes
You will have the transparency to view any changes in your credit rating and the factors affecting your credit score. If you notice that your credit score is gone low, then you can analyze the report to find out why and how you can act towards it.
#5. Check for the offers and best rates you’re eligible for
Once you track changes and see that you have a good credit score, then you can look for the offers you’re eligible for. You might be eligible for better interest rates, offers, higher limit, and other perks. When you have a good credit score, you can negotiate with your current credit card provider to lower your interest rates. Alternatively, see options to apply for for0% balance transfer credit card with your credit score to qualify your eligibility. Some credit card providers offer you to upgrade your credit when you qualify for a higher credit limit. Also, there are chances of getting approved for a home loan easily when you have a good credit score.
#6. Check the credit report information for accuracy
Make sure that the information in your credit report is accurate every time you check your credit score. Your credit score reflects your credit history, open or closed accounts, credit limits etc. So, any discrepancy in the information can lead to a serious issue. If you notice that credit score is less than you expect or any other changes lately, then you might need to report the error to the credit bureau for further action.
#7. Shape up your credit score
Good or bad, your credit score is going to reflect a lot about you such as the decisions you make, how well you manage your finances, are you eligible for a loan etc. You can be prepared to apply for a loan if you keep your credit score in good shape. This can be done by checking your credit score often.
Once you have understood the reasons why you should check your credit score, you should start checking it every now and then. You can monitor your credit score and if you feel it needs improvement, then you can start working on it.