In the past, most people didn’t bother about checking their credit scores unless they were serious about applying for a new personal loan or a credit card. However, today people have become more interested in their ratings and they are more informed about how they are calculated.
This rise can be attributed to the increased availability of credit score information from online platforms and the media. As such, people are getting interested in their credit profiles.
Know your position and maintain a good standing
As far as your financial health is concerned, your credit score is a critical indicator. Ignoring the score doesn’t do you any good and irrespective of the number, you are better off knowing how you are rated. If the score is not impressive, you can make it better with time and if you are satisfied with what you have, the best thing to do is maintain it.
Rebuilding your scores takes a lot of persistent action and the earlier you start, the better your chances of recovering quickly. You may need a couple of months to see an improvement in your score. As such, you should stay updated about your status.
As you make your score better, you will be able to get cheaper credit options. Whether you want a better credit card or a more affordable personal loan, it is important that you understand your credit scores. Also, an improved score can help you bargain for better terms with your existing credit card provider. If you find that a provider is reluctant to adjust your credit card interests downwards, you might want to consider shopping for an option with better terms. Of course, this will only work if you have spectacular scores.
To make sure you are not a victim of identity theft
Living in an age where cybercrime is a prevalent means that it only takes a couple of minutes for a criminal to breach your accounts and gain access to your personal information. While no one wishes to fall victim to this cowardly act, some people have suffered in the hands of cybercriminals. It’s as simple as discovering that your credit scores are getting lower and a closer look into your credit profile reveals that you have several accounts that you have no information opening.
Because millions of people have been affected by identity theft, staying away from suspicious websites, shredding emails, and locking your accounts doesn’t make you untouchable. If you fall, a victim, it can be quite tricky to dispute the fraudulent accounts successfully. In fact, people tend to spend several months to repair the damage caused by the criminals effectively. But if you can frequently monitor the score, you will be quick to notice any changes to your profile before it is too late.
Every time your loan application is declined, you get a free report
If you recently submitted a loan application or a credit card and it wasn’t successful, you can get a free report from the credit bureau that your prospective creditor used to assess your scores. Usually, you get clear instruction on the rejection letter guiding you how to acquire the report. However, this report must be requested within two months.
When you look at the report, you can gain a better understanding of the reasons for rejection. Whether there are erroneous reports on your account or you have other issues, you can figure out how to sort out the problem and stand a better chance with your next applications.
If you are tired of multiple rejections, you might want to use a secure credit card and rebuild your credit scores. This service is available from most banks as well as credit unions. This option allows you to deposit money in your account and then you are allocated a similar amount in your credit card. The card is used to make purchases and your payments will be reported to the major credit bureaus.
The money you deposit is not used to buy things but it serves as security for the borrowed money. If you are not able to pay the outstanding balance, the provider can use the amount to recover their funds. But if you are consistent with your payments, the amount is refunded and you might even get a higher credit allocation. The good thing is that payments are promptly reported thus improving your credit scores.
At what intervals should you check the scores?
A credit score may change rapidly since the details in your credit report influence it. If you are interested in keeping tabs on your scores, you can get daily updates. This is quite useful for people with intentions of buying a vehicle or taking a mortgage because you can prepare ahead of time. Under normal circumstances, checking the standings every month or after every six months is sufficient.
It is good to understand that a credit score is just a number that is derived from the information recorded on your credit report at any given time. If you want to change the score, you can only do so by changing the data in the credit report which means you have to improve payment and spending habits for some time. It is easy to get adequate information about the factors with the highest impact of credit scores and you can take action based on this information.
While a credit report is flooded with information that can be overwhelming at times, it is wise to take a closer look at each item. By doing this, you can ascertain whether your accounts, as well as payment details, are accurately captured. While account details seem basic, they can have a significant impact on your credit scores and the propensity to borrow. Because the law has entitled you a free credit report from the major credit reporting bureaus, it is important that you always check where you stand without fail. Besides helping you know your borrowing options, you will be better positioned to make improvements to your credit profile.
