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The Importance of Knowing Your Credit Score

By Ruth Racey
Published: Tuesday, January 28th, 2014

Act related to Fair Credit Reporting requires that the credit bureaus send the credit reports to consumers once per 12 months. This is very important because the credit scores related to the report will prove to be the deciding factor when you apply for loans or even seek employment. The credit report and credit score together reflect your financial condition for all the relevant parties. Any inaccuracies, errors, and omissions must be reported almost instantly to ensure timely addressing and resolving. When it comes to purchase of cell phones or a loan situation having a high score will surely help you significantly.

Ideally, one should check their FICO scores instead of those from the credit bureau because the latter does not give you the complete picture. However, it is necessary to remember that it won’t do to secure credit scores if you are not planning to go for a loan anytime soon. For most people regular checking of the reports are good enough. Studies show that in cases where the credit report is accurate, the credit score also remain so. Therefore, unnecessarily delving into it will be to no avail. By knowing the scores before taking on a loan, you will be able to determine the rates you will be expected to pay.

Different credit scores signify the associated quality and it builds up or brings down your credibility. If you feel that at a particular moment, your credit scores are less than stellar, why not wait for some time with the loan so that you will need to pay less as your scores improve. However, one thing is sure, putting too much emphasis on this is not appropriate. People with good scores no doubt that doing excellent when it comes to financial management and should keep it up as long as possible.

Those with average scores can veer anyway and it depends upon how they keep on with money management in the coming times. Ideally, they should hope for a better score in future without changing their lifestyle or spending habits too much. Finally, if you have a low credit score now, why don’t you seek some financial counseling? This will help you with a better budgeting and since you are already on the lower ground, the only way you can go is UP! Simply go full cylinders blasting and use your low scores as motivation for being smarter regarding credit. Also, do not forget to track it regularly as it improves.

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