When was the last time you checked your credit score? Do you even know what your credit score is?
You don’t need to check your score every month (or even more often), but you should get into the habit of doing so every six months or every year.
Here are some of the better reasons to regularly check your credit score:
1. To See Movement
It’s your hope that your credit score is going up, but there’s no guarantee. As you review it regularly, pay close attention to the direction in which it’s trending.
If your score dipped, take a closer look at your credit report to better understand why this happened. This way, you can adjust your approach accordingly with hopes of making up ground in the future.
2. To Detect Errors
Checking your credit score alone won’t do anything to tell you about errors on your credit report. However, if your score has recently fallen, it could be related to an error.
This will prompt you to review your credit score for any suspicious activity, such as a late payment that you actually made on time.
If you pinpoint an error, contact the credit bureau to dispute it. Letting it remain on your credit report is unnecessarily dragging down your score, which can harm your finances in many ways.
3. You’re Reviewing Your Credit Report
If you’ve requested a copy of your credit report from one or more of the three major credit bureaus (Equifax, Experian, and TransUnion), it makes sense to also review your credit score.
Doing this at the same time gives you a full overview of both your credit report and score, thus allowing you to make changes to your financial strategy or continue down the same path.
4. You’re Preparing to Apply for a Loan
When you apply for any type of loan – such as a mortgage, car loan, or personal loan (among other types) – the lender will take a variety of factors into consideration when deciding whether to approve your application. Your credit score always comes into play.
As you prepare to apply for a loan, review your credit score to better understand where it fits in. Do you have excellent credit? Good credit? Fair or poor credit?
If you can do anything to raise your score before applying for a loan, take action. Even if you only bring up your score a few points, it could help you secure a lower interest rate. And if you do that, it could save you hundreds or even thousands of dollars over the course of your loan.
If you’ve never checked your credit score in the past, you may find it difficult to get into the habit of doing so in the future. But once you have a schedule for doing this, you’ll realize just how beneficial it is to your finances.
What’s your credit score? Do you have a good reason for checking it? Do you have a plan for tracking it in the future?