Reasons Why it is Important to Check Your Credit Score Regularly

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manny

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Published on February 22, 2021

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Having good financial habits is very important and could help you to reach your long-term goals. One important part of this is having a good credit score, which will allow you to qualify for low-interest rates on mortgages and other loans. Due to the importance of it, you should check your credit score on a regular basis. There are several reasons in particular why you should check your score regularly.

You Will Know What Your Score Is

The main reason to check your credit score on a regular basis is so you know what your score is. Your credit score is a very important part of your overall financial health and knowing what it is, is always beneficial. If you have a good credit score, you will know that you are making good credit and financial choices. If your score is low, it will give you an indication that changes need to be made in order to get your score back up. 

Identify Mistakes and Fraud

If someone decides that they want to check my credit score, they will receive a full report that outlines all credit actions that have taken place over the past several years. This includes the activity of opening accounts, applying for credit, and making payments on time. Unfortunately, some people may find that there are mistakes on their report that are either accidental or even an indication of fraud. If there are mistakes, you will know about them and can take the next steps necessary to have the information removed. 

Contact Creditors to Have Information Removed

If you notice that there is inaccurate or fraudulent information on your credit report, it is important to have the information removed as soon as you can. Your credit report will conveniently provide contact information for each creditor that is listed on your report. The creditor will then give you a point of contact or provide a more formal process for challenging these claims. If it is determined that the account is fraudulent they will be able to have it removed from your credit report entirely which will immediately boost your score. Along with this, it is important to place credit freezes which each of the three credit bureaus which will prevent others from opening accounts in your name in the future. 

Know What is Affecting Score

If your credit report is accurate and your score is low, it is important to understand what is affecting it. Your credit score can be affected by many factors including the length of your credit history, whether or not you have made payments on time in the past, and what your credit utilization rate is. Based on this information, there are short and long-term financial decisions that can be made to improve your score. This can include paying down your credit card balances, coming current with your creditors, and making all payments on time in the future. 

Apply for Loan with Confidence

Even if you do not intend to apply for a loan anytime soon, there could always come a time when you need to have a good score. If there does come a time in which you will want to buy a home or car, or even take advantage of a great credit card promotion, having a good score will be beneficial. By checking your score regularly and working hard to improve it, you can be assured that you will be able to apply for a loan with confidence. 

Your personal credit score is an important part of your overall financial health. The most important part of maintaining good credit maybe understanding what your credit standing is, to begin with. There are several important reasons why you should check your credit score and report regularly.

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