Nearly everybody knows the importance in today’s society of your credit score, and how beneficial it is to keep the score high. Sadly though, maintaining an ideal credit score is often easier said than done. Even if you’re a responsible consumer, keeping your score in shape requires regular monitoring of the three major credit bureaus.
For many people, the only time that they find out about issues with their credit score is when they are attempting to obtain a new loan, such as to purchase a house or a car. Finding out about credit trouble at this point can cause big interruptions in your plans to make your purchase. While credit monitoring is often put off because consumers don’t plan on making a large purchase in the near future, removing bad marks on your credit report can take an extended period of time so beginning early is crucial. In this article we will discuss a few of the reasons why you can’t put off monitoring your credit score.
You Need to Apply for a Loan
If you are thinking about getting a loan in the next six-to-twelve months, whether it is for real estate, a car, business or even personal reasons, you need to start working on your credit score right now. Even though you may have a respectable credit score at the moment, making improvements will lower the interest rate you pay on your new loan which can save you a lot of money in the long-run. Getting your credit in line now can also help you spot any blemishes on your report that you weren’t aware of, giving you time to get them sorted out.
It Stops Identity Theft, Doesn’t It?
While there is no actual way, short of never leaving your home or making purchases, to “stop” identity theft, monitoring your credit score will provide you the ability to notice any instances of illegitimate accounts on your credit profile and take care of them appropriately. According to a survey by the Australian Bureau of Statistics, 6.7% of Australians are victim to identity theft each year. It is much easier to repair the damages of identity theft at this point than six months later when collection agencies are looking for you.
Fraud or Mistake?
It is not out of the ordinary for you to find an unusual account report in your credit history. While many times this can be the result of fraud and identity theft, often times it is a result of a simple mistake. By monitoring your credit score regularly, you will be able to catch any small, negative results which otherwise may have been skipped over and had a negative impact on your credit. By contacting the source of erroneous entries in your report, you can often times easily have them removed if the request is done promptly.
Monitoring Helps to Measure Financial Health
Your credit score also shows you a picture of financial health. With this, you can take steps to further improve your credit score, but if you don’t know where you stand, you won’t know where to begin and where to end. Therefore, knowing about your financial health will keep you on track and you will be able to not only improve your credit score but also avoid any transactions which can affect your credit report negatively.
Once you understand the importance of why you should manage your credit score, the next question is – how to keep track of your credit?
Since continuously searching through the records of all three credit rating companies would be difficult and very time consuming, there are many of other viable options online. Many companies offer credit monitoring services which will keep track of your credit scores on your behalf and notify you any time a negative or major event is recorded in your credit history. These businesses can also help you get negative issues removed, making the process much simpler.
No matter how you go about, monitoring your credit score is vital to your financial health. Whether you plan on making a major purchase in the near future or not, keeping your credit score healthy all of the time will make financial decisions in your life easier, and will also save you a lot of money in interest charges.
Hugh Tyzack is the founder of http://www.gbploans.com, which specialises in no fee loans for people with bad credit. Follow Hugh on Twitter @GBPLoans and also on Google+