In today’s day and age with the technology and websites that you have access to, there’s no reason why you shouldn’t know your credit at all times. While it does change, you have the ability to check credit score at a moment’s notice. It gives you the power to stay in control of your credit and your finances.
How to Check Your Credit Score
It’s a good idea to check credit score periodically so you know what it is. You don’t want to apply for a mortgage, an apartment, or a line of credit at a store only to be told you don’t qualify. It can be embarrassing and leave you in a lurch. With good credit scores comes greater opportunities.
To check a credit score, you need to work with a website that gets information from all three major credit reporting bureaus – TransUnion, Equifax, and Experian. Your FICO credit score will be a number between 300 and 850. Anything above 650 is considered “good.” However, you will want to be above 700 to qualify for the lower interest rates that are out there.
Checking your credit score is something that you should do on a regular basis. You want to know more than just the score, too. A comprehensive report will tell you the lines of credit that you have and what information they’re reporting to the different bureaus.
Not all credit score checking websites are created equally, either. Some will allow you to access your score once a year at no cost. Others will charge you an annual subscription fee. This is information that affects your finances – and you should make sure you check it for free.
Know What Impacts Your Credit
Since you know that your credit score is important, it’s important to know what goes into it. After all, how come some people have really high scores and other people have really low ones?
There are quite a few factors that affect your credit score:
- Payment history
- Amount owed
- Length of credit history
- New credit
- Types of credit in use
While your payment history is the most important aspect, all of the others can weigh in dramatically. The length of your credit history and new credit go hand in hand. If you don’t have a lot of established credit and you suddenly go open several new accounts, it can send your credit score crashing by quite a few points.
It’s important that you make your payments on time. As soon as you make a late payment, it can hurt you even more based on how late you are and if it’s been sent to collections.
Each and every time you open a new line of credit, it will affect you. This means you have to consider whether you really need a new account somewhere. If you’re opening a new account up with every department store you do business with just to get their “new customer” discount, it can end up costing you with your lower credit score. If you need the account, just be sure you’re aware of the ramifications.
Be Prepared for the Results
What are you going to do with your credit score? Well, it depends on whether you are searching for errors or you plan on applying for something. There’s no wrong answer. The only way to stay in the know is by choosing to check a credit score from time to time.
As you apply for various things, you will be told of your credit score. However, why should you have to wait? You don’t want to be surprised by a score.
You need to remember that when you apply for a line of credit to get your credit score, it’s going to impact your credit score. It’s because the company is making an inquiry on your credit – and that will count against you.
It’s also important to know what the difference is between a hard check and a soft check. You can have soft credit checks that won’t impact your score. This includes such things as personal credit checks (like what you want to do right now) and insurance and employment applications. Hard checks are what happens when you want a line of credit (or an increase) or want to rent an apartment or establish a utility account.
Check Your Credit Score to Learn More
The reality is that you want to know your credit score throughout the year. If you wait too long to check credit scores, you may find that it has dropped dangerously low. Conversely, if it has jumped to an acceptable number, it might be time to take action – like apply for the mortgage you’ve been hoping to get.
Checking your credit score also allows you to fix errors. After all, why should you have to deal with a lower score because a creditor made a mistake? If you’ve been a victim of identity fraud, it will often show on your credit score, allowing you to do something about it.
When you want to check your credit score, you should have access to it whenever you want – and without having to pay for it. When you know the score, it’s easier to make financial decisions that will have a lasting effect on your budget. If it’s been a while since you checked on your score, it might be time to do it.
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