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Why It Is Important to Keep Tabs on Credit Score

By Janet Lacey
Published: Wednesday, November 28th, 2012

For anyone to get any kind of loan the credit score will be evaluated and in fact it is the most important is deciding factors if you will get a loan or not. Therefore checking your credit score at least once a year will help you get a better score by ensuring it’s correct. Once in a while a creditor could report inaccurate data and it might get updated in your credit report and this might affect the credit score adversely. A simple typo error could have major effects on your credit score. If this error is not corrected, creditors will follow the information provided to determine if you are a big risk or not.

Checking your credit score is also important because once you check your score and find that you are below the acceptable limits you can always ask for a report to find out what is going on with your accounts. There could be some irregularities going on in your accounts. Credit theft cases have been increasing and you could have fallen victim to such irregularities. At the same time once you check the report and find that the information there is old and outdated you can always ask them to update it. This will go a long way in helping you earn good credit score.

Checking your credit score will also determine if you can apply for another loan or not. If your scores are high you will be able to find loans with good interest rate. This is to your advantage because you will end up paying less money compared to someone who has a poor credit score. Keeping tabs on the credit score will also help you be prepared psychologically in case you apply for a loan and rejected simply because your credit score is rated poorly. Sometimes you might be given a loan but, at higher interest rates because the score is low and the lender has to take a big risk.

Finally checking your credit report puts you on the right path towards repairing your credit score if you have done any defaults. This is because once you find out that your credit rate is below average you can start working on ways to improve it. The good news is that even insolvent people who had filed bankruptcy can improve their credit score by starting fresh. You have to remember that improving one’s score can be a very slow process and it might takes months before you see any significant improvement. But it’s a definite step in the right direction.

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