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Why Check Your Credit Score Periodically

By Ruth Racey
Published: Monday, October 5th, 2009

If you need to apply for any type of credit, the first step you should do is check your credit score. Whether you are in need of a loan or a credit card, remember that lending companies and card issuers will often require a fairly good score to approve the application. If you have a low score, the application may be declined if you submit it to a lender that requires a high score.

How can you check your score? You can obtain a copy of your credit report from any of the three major credit reporting agencies in the US namely, Experian, TransUnion or Equifax. Each of these credit reporting agencies do their jobs separately so you may notice differences from one bureaus report to that of the other. The important thing is to compare your reports and make sure that there are no unauthorized charges or errors on each of your accounts.

Once you have checked your score, you can know for sure whether you can pass a lender or card issuer’s credit requirement. However, what if you discovered that you have a low credit rating? Checking the report in advance can help you decide whether to push through with the application or work on improving your credit first before applying for a loan or a credit card.

If you can wait for a few more months before sending in the application, you can make a significant change in your credit score. It is possible to raise your rating within 6 months or even less by paying off your debts and keeping up with current payments. By increasing your score even by just a few points, you can enjoy lower rates from lenders.

Checking your personal credit report should not only be done before applying for new credit. It is recommended to order a copy of the report periodically or at least twice a year. It would be better if you can get one copy from each of the three major bureaus to ensure its accuracy.

What can you do if there are charges in your report that you know are incorrect? Such errors are common in credit reports and consumers have the right to request for corrections. Those errors can cause damage to your final credit rating and in fact may be the reason for your low score. To straighten out this matter, send a dispute letter to the credit reporting agency where you ordered your report and point out the details that need corrections. After 30 days, you should be able to get a reply from the credit bureau regarding the action taken along with the new copy of your report.

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