The primary piece of information that lenders examine when deciding to accept an agreement and lend you money is your credit score. The larger your loan, the better the lending value, the more probable it is for lenders to view you as a trustworthy borrower.
Are you aware of your credit score? You will be more aware and more equipped to enhance your credit position if you check your credit score often. We have highlighted five reasons why you should routinely check your credit score so you can start rebuilding your credit.
Why should you frequently check your credit score?
1. The process is simple
It’s easier than ever to get your credit information now that our world has gone digital. So, what kind of credit data are available? Your credit report and credit score are as follows:
Your credit report contains information on your borrowing history, including active loans, payments, credit limits, and the amount you owe on each loan. Your credit score is influenced by your credit behavior, which is recorded on your credit report.
Your credit score is a three-digit figure that ranges from 300 to 900 and indicates the risk you pose to creditors. Your credit risk is the probability of you paying your bills on time or repaying a loan according to the terms agreed upon. The better your credit score, the smaller your lending risk, therefore more lenders will be willing to extend you additional loans.
You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies. Order online from annualcreditreport.com, the only authorized website for free credit reports.
2. Checking your credit score will not bring it down
Many individuals believe that checking their credit score will lower it, although this isn’t always the case.
There are two sorts of credit inquiries: “soft inquiry” and “hard inquiry”
Requesting a copy of your own credit report or credit score is referred to as a “soft inquiry,” and it has no impact on your credit score. If a lender is doing a background check in order to approve you for a car loan, mortgage, or new credit card, they may conduct soft inquiries.
A “hard inquiry,” on the other hand, will have an effect on your credit score. When a potential lender analyzes your credit history in order to make a final decision on a loan application, this is known as a hard inquiry. Credit checks like this will decrease your score and usually stay on your record for two years.
3. You will be better at catching errors if you keep on top of your credit
Checking your credit report once per year (at the very least) is an excellent method to remain on top of your credit activity and confirm that the credit bureaus haven’t made any errors. They do happen and depending on the error, it may result in a reduction in your credit score, which is something you really don’t want. Monitoring your credit score can also help you make sure you aren’t being charged by the wrong accounts or that you haven’t been the victim of identity theft.
4. You will not be surprised by the results of your loan
If you’ve ever been turned down for a loan, you know how frustrating it can be. You may avoid being shocked by the outcome of a loan application in the future if you know your credit score.
Most lenders base their judgment on your three-digit credit score when deciding whether to accept or refuse your loan application. In other words, the better your credit score, the more creditworthy you are and the smaller your chance of default. Most lenders prefer dependable consumers and are more likely to provide low-interest rates to those with strong credit ratings.
5. Understanding your credit score can assist you in improving your credit
It’s empowering to know where your credit stands since knowledge is power. Finally, understanding your credit score — whatever it is – can assist you in improving your credit and achieving your financial objectives.
Even if your credit score isn’t ideal (less than 620), it’s not the end of the world. A poor score now does not imply a bad score in the future, and there are several ways to improve it. Rebuilding and Repairing Your Credit Score are 2 methods we recommend you to do.
If you are still having trouble with your credit score. Please contact us. With a professional team and many years of experience, we can help you overcome that difficulty.
Schedule an appointment today for a Free Consultation.
CLICK HERE: https://jennfinancialsolutions.com/credit-consultation/