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Why It Is a Good Idea to Regularly Check Credit Score Ratings

Without a doubt, your credit score matters a lot in the United States. When you want to purchase a home or vehicle, for example, you will probably rely on at least some credit if you are like most Americans. To qualify for these types of credit, however, individuals need to have solid credit scores.

As such, it can be a smart move to regularly check credit score ratings. Because finances can easily change due to any number of events, keeping up with your credit score can be one way of getting a handle on your financial picture overall. In addition, there are several other reasons worth considering. Here are seven of them.

Every Late Payment Makes a Big Impact

Even if you have a solid credit score, one single late payment can make a big impact on your overall number. For this reason, regularly monitoring your credit history will allow you to know if there is ever a late payment mark that might cause issues for your financial future.

Every “Hard” Credit Inquiry Matters

Another reason to regularly check your credit is because doing so also allows you to track the number of credit inquiries you have made. If, for example, you have already applied for several types of credit this year, it might be better to wait before adding any more “hard” inquiries that might lower your score.

It Is Worth Double-Checking for Inaccuracies

At the end of the day, the people who record your financial information for the three major credit bureaus are regular individuals who are perfectly prone to human error. With this in mind, it is wise to always double-check your annual credit report for any possible inaccuracies. In addition, systematic errors can also happen. As such, you never know what type of inaccuracy might come up, but double-check all of the information.

Fraud Can Happy to Anyone

Another factor to consider is fraud. Undoubtedly, it can happen to anyone. By regularly monitoring your credit score, you can immediately notice if there is a mark on it that should not be there. If there is, there are steps you can take to remove it from your history. Keep in mind, it may take some time. When you notice a problem early, it gives you more time to act. Ideally, you will notice before it hurts your credit too much.

Knowing Your Credit Score Can Help You Avoid Undesirable Surprises

How many times have you applied for a credit card or loan only for an unexpected (and undesirable) surprise to show up? To make matters worse, you had to learn about it from a mortgage or car loan lender. Yikes! By keeping up with your credit score, you avoid these uncomfortable situations.

Credit Scores Offer Insight

If you are currently looking at ways to strategize your credit utilization approach, monitoring your credit score can also be great for that. By noting when your score is best and what your utilization looks like, you can more accurately identify the best opportunities to borrow and the best times to wait.

Self-Awareness Is Key to Financial Success

No other reason supports regularly checking your credit score like simple self-awareness. Regardless of what type of financial methods and approaches you might incorporate into your life, self-awareness is ultimately the key to achieving and maintaining financial success. When, for example, you are able to see where you are doing well and also the places where you can improve, it gives you the opportunity to reflect on your overall situation.

Understanding your own financial history is a critical part of debt recovery. Use this information to inspire you to closely review this year’s free annual credit report.

 

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