Do you know how important it is to check your credit score regularly? No right?
Well, you might not be aware of its importance but don’t worry, we have got you covered!
For the uninitiated, it’s very important to check the credit score regularly because that’s how lenders evaluate our creditworthiness.
The credit score helps us in staying updated if there is any change in the same.
So when there’s a fall, then we can track down the reasons and also rebuild our credit score in time. Similarly, when there is an increase in our credit score, then we can review it to understand how our credit score can be improved for future reference.
Some people don’t check their credit scores at all as they are afraid of what they’ll find when they look. And, there are some people who have a misconception that checking their credit score can affect their credit.
But that’s not true! As long as you use a credit scoring service for checking your credit score, your credit won’t be affected.
You must check your credit score regularly for having control over your credit and your financial life. So, in today’s blog we will be discussing 6 reasons that why is it important to check your credit score regularly:
1. Understand your Financial Standing
Just like you go for regular medical check-ups which are necessary for keeping your health in order, similarly regularly doing your credit score check is also important for your financial well-being.
If you have a good CIBIL score, then you should ensure that you will follow the right financial practices, like paying your Credit Card bills and loan EMIs on time for maintaining it. If your score is low, it’s even more important that you should take remedial measures for maintaining it.
Whether it’s good or bad, it’s better to get your CIBIL score checked than having no idea where your credit stands. The good news is that even if you have a bad score, you can always take steps to improve it. Or, if have the best credit score then you can focus on maintaining it.
2. Make sure your credit is in good shape
In school, we can usually neglect our homework for weeks, then study for a test and pass it. But one should note that Credit scores don’t work that way. If you want to apply for a loan urgently, then you can’t get your score ready over a few days. It generally takes months, or even for building up a good credit history. Thus, monitoring your score helps you in controlling your credit and also helps you in keeping your score at its best.
3. Ensure that your Credit Information in Accurate
Our credit score is a reflection of the information in our credit report. Thus, checking your credit score will help you to determine whether your credit report is accurate or not. If your score is lower than you expect, then there must be some errors in your credit report which you need to clarify with the credit bureaus.
4. Get Useful Insights about your Credit Score
Do you want to understand how your Credit Score works? You can understand that by just looking at your credit report. It holds all the secrets about your score. The credit report shows various parameters which influence your score.
Each parameter contributes to your score. So, you need to study these parameters which will tell exactly what’s going right and what isn’t. Thus, by analysing your score, you can focus only on those areas which are pulling your score down than on the other parameters that have a positive effect on your score.
5. Know about changes in your Credit Score
You need to regularly check your score as it informs you about any changes in your score. If you notice that your score has fallen then you must figure out what has caused the change. This will help you to take immediate steps for recovering the score points that you lost.
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6. Know when you can qualify for better offers
As your score improves, then you have a better chance of being approved for credit cards that have rewards, or other perks. Or, you can use a good score for requesting your current credit card issuers to lower your interest rates. If your credit card issuer won’t agree to give lower your rate, then you can consider applying for a 0-per cent balance transfer credit card—a better score will improve your chances of qualifying for the same.
You can also watch our video:
Where to check credit score?
How often should you monitor it?
It mainly depends on you but a monthly review should be sufficient enough for keeping you informed about any changes which might reflect in your credit report and also affect your score.
What are the charges for checking credit scores?
There are no such charges for checking your score.
Can checking one’s credit score lead to a fall in the score?
No, checking your score is a soft inquiry and it will not affect your score. Only hard inquiries for your report when made by lenders or credit card providers when you apply for new credit can impact your score.
What are the key components of a credit report?
The main components that make up a credit report are Personal information, Contact information. Employment information, Account information, Enquiry information
We hope that the above 6 reasons were enough to convince you to check your credit score regularly. So, what are you waiting for? Go check your credit score!
We hope that you found this blog informative and use the information to its max potential in the practical world.
Until then, share this blog with your family and friends and help us in our mission of spreading financial literacy.
Credit Score – 6 Reasons to check your Powerful Credit Score Effectively is written by Elearnmarkets for www.elearnmarkets.com