Why Knowing your Credit Score is Important

Your credit score says a lot about you to your creditors as far as what debts you have and how you pay these debts. Anytime you apply for any type of credit, whether it’s a loan, credit cards or even services with a satellite provider, someone will be looking at your credit report and your credit scores. Credit reports provide you with a number which is based on different factors on your credit report, including amount of debts, type of debts, balances and how they’ve been paid in the past (on time, past due, etc.). Many people don’t realize the importance of knowing their credit scores. Following are ten reasons why it’s important to know your credit score.

 

1. To prevent any possible identity theft. By looking at your credit score, you’ll know if there’s something you should be aware of and if this something is accurate. The inaccuracy may be something as simple as your name spelled wrong or an incorrect social security number but these discrepancies may indicate there are other errors.
2. You can compare your scores given by the 3 major credit card companies. Your credit report will be give by 3 agencies and while their scores may not be identical, they should be similar. If you notice a large difference, it’s reason for you to investigate why the difference.
3. Knowing your credit scores will let you know how you’ll look in the eyes of lenders if you’re considering getting a loan.
4. You may notice a debt that’s listed as unpaid even though you know it’s been paid in full. You can contact the creditor and ask them to make the correction. It’s better you realize this now than when you’re seeking credit and having to explain the debt.
5. You may find a long overdue debt that you thought was paid only to learn it’s still unpaid.
6. If there’s debts that aren’t yours, you can have them corrected, which often takes time. Occasionally members of the same family with the same name experience problems like this. You can write a letter to the credit bureau explaining the error along with proof. Because this may take time to get this corrected, it’s important to act on it as soon as possible.
7. You may have had debts that would improve your credit scores but aren’t even listed on your credit report.
8. Loans you may have had in the past may be listed incorrectly (e.g. mortgage loan listed as an installment, etc.). You may not put much importance on this but it can affect your credit scores.
9. If your scores are low, you can learn what’s causing them to be low and begin to correct them.
10. You’ll have the chance to increase your scores before you need to apply for a loan or any other credit in the future.