Credit Score. These two words can seem very scary and daunting.
It's something people run away from because they are afraid of what their score might be. It's also the last thing on our mind until you're ready for a loan or a big purchase.
Fortunately, checking your own credit score through a credit scoring service does not impact your credit. It's a good financial practice to stay up-to-date on your credit score and review your credit report regularly. Here are three good reasons to check your credit score on a regular basis:
1. You know where you stand and how to improve your score. It's better to know your credit score than to be clueless. If you're thinking about buying a house or a car, knowing your credit score beforehand will help you know what you can and can't afford. If you find that your credit score is subpar, take the necessary steps to improve it. This makes yourself accountable and puts you in control of your financial health.
2. You gain insight. Monitoring your credit score gives you insight about what helps and hurts your credit. You'll be able to see what specific financial decisions impact your credit score and the necessary steps you need to take to get your credit score going in the right direction.
3. You can check for errors. Checking your credit score on a regular basis is important for catching errors. Some errors may be honest mistakes and some may indicate fraud. It is also not uncommon to find someone else's information on your account if your social security number is off by one or two digits or if you have the same name. Other errors include incorrect personal info, outdated account information, missing accounts, and missing payments. Make sure you check each line item accordingly and contact the credit bureau you received your score from to solve any discrepancies.
How often should you check your credit score? Our advice is to do it anywhere from monthly to semi-annually. You can use free credit score checking services like CreditKarma.com and CreditSesame.com, but understand that these scores are simulated. They may not be the actual score on your credit report. For a more accurate score, you can purchase your credit score through companies like Equifax and TransUnion.
