When should I check my credit score?
If you’re someone who is always borrowing money, then you would know that it is important to keep on top of your credit score. It’s one of the first factors that a lender will consider when assessing your application for credit. But what if you are not someone who is always borrowing money? What if you are applying for a one-off credit card? Should you still check your credit score?
Put simple.
YES. It is important to check your credit score.
Why?
Here are some reasons why you should check your credit score.
To remove errors on your credit file
Humans are just that, human. Credit providers, banks and credit reporting bodies can all make mistakes from time to time. If you keep on top of your credit score, you can quickly assess whether or not you have any discrepancies. Perhaps there are other borrowers with a similar name. A contact number may have been mixed up or the telecommunications provider may have incorrectly followed the reporting procedures. These are all possible reasons that may drag your credit score down. Therefore, it is important that you always check your credit score. The last thing that you want is to be declined a loan due to a negative listing on your credit file.
Prepare yourself for a loan application
Did you know that each time you submit an enquiry for a loan, a hard enquiry may be placed on your credit file? Did you also know that these enquires can actually decrease your credit score? Now, imagine you apply for 5 different loans. What if each company rejects your loan it’s more than likely that you will be left confused and frustrated as to why it has been declined. This is a common occurrence that happens to many people.
Often, it’s due to a default, black mark or court judgement that was placed on your credit file. A thorough credit assessment is therefore important as it can help you understand what is in your file. For this reason, you must check your credit score, especially before applying for a new loan.
Your credit score will help you when you really need it to.
Think about your credit score like an emergency fund of savings. An emergency fund is your savings that you keep hidden away for the right time. In a similar sense, your credit score is the same thing. If you’re looking to apply for a loan or you are in need of credit, then your credit score can kick in to help you get that loan approval – that is of course if it is positive. If your score is negative, then your credit score is not your emergency fund, it’s actually the villain. The point of this – it comes in handy when you really need it.
Understand what is impacting your credit score
Whilst an error can drive your credit score down, it is not your fault. It’s due to an error outside of your control. There are, however, internal factors that can impact your credit score. Expensive purchases, late payments, missed payments and closing long term credit accounts can all have a negative impact on your credit score. When you are aware of what is impacting your credit score, you can make lifestyle changes to improve your financial situation. The key to understanding is, therefore, checking your score.
To prevent identity theft
In the unfortunate case of identity theft, your credit file can be severely impacted. As such, it is essential to check your credit file for any issues. Assess your purchases, transfers and bank transactions. If you notice any issues, speak to a credit bureau, your bank or financial institute and of course report it to the police.
There’s no effect on your credit file
One of the most common misconceptions with your credit score is that actually checking it can damage your file. This is NOT true. Credit assessments offer comprehensive credit checks that are pulled from the three main credit bureaus. We’ll assess your file and keep you up to date with all the important information contained within it. All of this will not have any effect on your credit score leaving you free to apply for the right credit when needed.
