Do you know that in a recent study 42% of Americans do not check their credit scores or FICO scores annually even though reasonably priced or free credit check offers are available? Being aware of one’s credit worth can greatly help an individual become financially stable in the long term.
A person’s credit score report has the ability to affect various financial opportunities in our daily lives from new card approvals to possible home loan interest rates and many other monetary concerns. Being aware of your credit standing can help you make better financial decisions for you and your family not to mention the money you could save so it does pay to put in the extra time and effort to be better informed.
Why you should consistently monitor your scores?
Institutions like banks, credit card companies and car dealerships (to name a few) in part base their approval or rejection of a loan application on the value of your fico score. If you discover that your rating is lower than what the establishment normally considers acceptable, you will then have the chance to try and raise it before you apply for a loan. This way you can increase your chances of your loan being approved.
Interest rates on loans and credit cards have been known to affect one’s scores. This means that if your number is high enough to qualify you for a lower interest rate then you will have extra money to save or invest which will positively affect your financial stability. Applying for a credit card or other types of loans when your rating is low puts you at risk for higher interest rates.
Credit reports and scores are also viewed by landlords as well as potential employers. A healthier score could be interpreted by landlords and bosses as a sign of maturity and in so doing creates a more positive impression that can bring about favorable results.
A sudden change in your credit file can indicate possible identity theft and your credit report may also contain information as to fraudulent credit card applications or loans made in your name. Regularly checking your scores can warn you of illegal activity and counter measures can be taken.
The need to be aware of this number is not information you will utilize only when you apply for a major loan but it is information that affects your daily life as demonstrated by your credit card interest rates or the availability of an apartment. This is the main reason why using these one time score offers to keep up to date on your credit scores is an opportunity you should not pass up.
Knowing you credit or FICO score through a credit report can help you devise a plan of action in order to improve your standing and increase your chances of a loan being approved or interest rates being lowered. If you think that your rating is probably fine where it is, it might be useful to know that the average score most lenders consider as healthy is in the higher 600s; unfortunately around 40% of Americans have a score lower than that as reported by Credit Karma. This means that per 10 people, 4 will most probably be rejected for a mortgage or car loan and have to pay high interest rates on credit cards or other loans.
Now, do you still think that not taking advantage of these annual offers is acceptable?
How can you signup to get the free score offers?
There are three major consumer reporting companies that can provide your credit scores and these are TransUnion, Experian and Equifax. These companies provide you the service of completing a credit report on you which includes your score. This service however is not free and usually comes with a monthly fee.
Fortunately for consumers the government’s Fair Credit Reporting Act requires that each of these companies provide you with a free credit report once a year. You can order your free report only at annualcreditreport.com. In order to maximize this free service you can ask for your free credit report once every four months from a different reporting company. In this manner when you get your first credit report you can identify which areas you can improve to raise your score.
Next, implement necessary actions and four months later ask for a credit report from a different company to verify if your initiatives worked. Spreading out your requests also allows you to monitor if someone is trying to steal or manipulate your identity. Being vigilant about identity theft by utilizing 1 time score reports allows us to minimize legal and financial damage to our identity and resources.