Why you should keep track of your credit report

According to a recent poll conducted by the National Foundation for Credit Counseling, it’s been found that most Americans don’t even know their credit scores. About 65 percent of the people in the US haven’t even tried to find their credit scores in the last few years. Although some people do understand the importance of credit scores, there is a need to teach the public about how important it is to keep track of their credit history.

Why Should You Check Credit Score?
If you want to apply for a home loan, car loan, or even a credit card, your lender is going to check on how well you’ve made past payments. That’s what the credit score denotes. A high score means that you’re responsible and you’ve been paying off bills and loans on time.

When you know your credit score, you can negotiate for favorable terms and rates of interest. There are chances that there’s a mistake in your report. That can be potentially disastrous. Knowing how to spot errors in your credit report is a great way to ensure that you know how the system works so you can make the most of it.

Even if you don’t have any plans of securing credits immediately, the free credit score will let you understand your own financial habits. Here’s a few things that you can do to manage your finances efficiently and improve your credit score.

Request a Free Copy of Your Credit Score
Your credit report not only has the credit score but also payment history, account types, usage of credits, and inquiries. You are entitled to receive a free credit report from the national credit bureaus once a year.

Check if The Credit Report is Accurate
Go through the credit report carefully to check for any instances of identity theft. This can be through a wrong social security number or account information or address that you aren’t associated with. Federal Law allows all individuals to challenge and demand any changes to ensure that the information given is accurate. When you know the areas which are inaccurate, you can make changes to provide proper information.

Have A Budget To Control Finances
Every family has a different approach to monitor their expenses. But you can begin with a simple comparison between your monthly earnings and monthly expenses for the past six months. This helps you to stop making unnecessary expenses that can save you a lot of money in the long run. If you can make a habit of collecting the free credit score report every year, it can help you plan out your finances properly. When you know the content of your credit report, that can help you find out where you’re lacking and where you can improve further.

Ensuring that everyone knows what their credit score is as important as everyone knowing their date of birth. It’s a vital part of a person’s identity and financial well being. It should be made a practice to ensure that everyone has this knowledge so that they can make the most of it.

Personal Finance

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