Do you know what your credit score is? If you answered no, don’t feel bad. Most people couldn’t tell you with any kind of accuracy the number on their credit report, even though it has the potential to impact their lives in a major way. Suppose, for example, that you’ve finally managed to set aside a decent amount of money towards a down payment on a home. However, when you go to a bank seeking approval for a loan, you could discover that ancient black marks on your credit report related to massive credit card debt and a spotty payment history will set you back significantly. Even if you cleared up these issues a long time ago, a failure to check your credit report could mean that they’re still dragging down your rating, leaving you with fewer (and less appealing) options when it comes to taking a major loan. In short, there are plenty of reasons why you should check your credit report on an annual basis. Here are a few that should get you going.
Awareness. If you don’t know what your credit report says you can hardly expect to improve it. And if you want to make any major purchases in the future (a car, a home, a business, etc.) you need to have a top-tier score in order to get the stellar interest rates and other terms that you’re seeking. Your credit score can not only make or break your chances at loan approval, but also your ability to attain rates that you can actually afford to repay. So before you even think about looking for a loan, you should check out your credit report to see if you’ll even qualify.
Address errors. In addition to the financial blunders you know about (your ever-growing credit card debt, for example), there could be black marks on your credit score that you had no idea existed. By checking your score you can not only begin to address issues you know about, but also clear up any black marks that should have been removed by now, as well as address any erroneous listings that have somehow made their way onto your credit report. Hey, it happens, and if you fail to check your report, you might not realize that such errors are dragging you down.
Avoid identity theft. Your credit report can quickly provide you with proof of identity theft, allowing you to deal with it sooner rather than later. This criminal act can destroy your credit and lead to months or even years of clean-up efforts to get your score back to normal. When you pay attention to your credit report you can easily spot suspicious activity, pinpoint the cause, and stop imposters from wreaking havoc on your credit.
Increase your score. When you review your credit report on a regular basis you will start to spot patterns in your spending. This can help you to come up with ways to improve your credit score over time, such as limiting credit card spending and paying your card in full each month, or carrying small amounts of debt so that you can benefit from interest payments, just for example.
It’s free! Your debt solutions don’t necessarily have to cost an arm and a leg. You can do a lot on your own by simply checking your credit report and making adjustments as needed. And you can do this for free by going to www.annualcreditreport.com to order a complimentary copy of your report once a year. In truth, you might not want to check your report too often, since frequent requests can actually have a negative impact on your credit score. But ordering a report once or twice a year will help you to track your rating, clean up your record, and avoid attack. And with free options out there you have no excuse not to check your credit report annually.
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