The Importance of Checking Your Credit Score

When was the last time you looked at your credit score? It’s probably not something you do too often, except when you’re financing a car or getting started with a loan. Well, your information is constantly being updated, and it’s not just available to creditors, it’s also used by potential employers for hiring decisions. All of this information is floating around out there with your name on it, so it’s up to you to keep tabs on it.

Five Reasons to Check Your Credit

Your credit score is a window into your financial reliability. Anyone who sees this information can use the data to make decisions about your risk level as a potential client. Here are five great reasons to check your credit score:

• To Make Sure Your Score is Accurate. The number one reason to check your credit score is to see what it is and if the information is accurate. It’s quite common to find errors, and you should dispute these with the credit bureaus.
• To Get a Loan. If you’re planning on getting started with a loan, you need to know what your credit history says. The more pristine your payment history, the lower interest rate you’ll be able to secure.
• To Avoid Identity Theft. Your credit report will reflect any unusual activity, such as unexpected credit cards or unfamiliar loans. Keeping tabs on all your accounts is vital to preserving your identity.
• To Keep Your Car Insurance Rates Down. Insurance companies use credit ratings to compute insurance rates. People with poor credit are considered more risky to insure, while better credit is associated with less risk.
• To Reduce Future Risk. Checking your credit report frequently will help reduce the chances that outdated, inaccurate, or fraudulent information makes it on there. You can stagger your requests from each of the credit bureaus so that you’re checking every four months or so.

Quick and Easy

Checking your credit score is quick and easy. Go to annualcreditreport.com to receive your reports from the three major credit bureaus: Experian, Equifax, and TransUnion. These are available at no charge once every 12 months.