Most people do not check their credit score until they are planning to borrow money or apply for some type of financial product. They believe that since the information that is used to calculate the score is obtained from other parties, there is nothing that they can do to change their score or the information that was used. There are a number of good reasons why you should be checking your credit score on a regular basis and performing these checks can help you increase your financial stability.
Fixing Your Credit Score Takes Time
Although ruining your credit score can happen very quickly, fixing your credit score can take a great deal of time and energy to accomplish. If you only check your credit score when you need it to be approved for credit, you may be unpleasantly surprised at the value of your score when you see it and by then it may be to late to repair it before you need to have that loan or credit card. Since your credit score has a direct correlation to the interest rate that you will be charged for the loan, neglecting to check your credit score could end up costing you hundreds of dollars in additional interest payments.
Errors Can Cause A Credit Score Drop
It is important to check your credit history and credit score to make sure that no inaccurate information has been entered into your records. When incorrect information is found, it could take 30 days or more for it to be corrected or removed from your credit report. Fixing errors in your credit report will typically involve numerous phone calls, providing documentation, and waiting for responses from the credit monitoring bureau. If you are already in the process of applying for a loan when you discover the error, you may not be able to have the error corrected before the loan closes or your application is rejected.
Identity Theft Can Be Caught Quickly
The best way to stop identity theft is to check your credit reports regularly to make sure that you are aware of everything that is being reported. Identify theft affects millions of people every year, costing billions of dollars in lost money and wasted time. Indications of identity theft typically appear as an unknown account on your credit report, so if you see accounts that you did not open or your credit score drops suddenly, you may have become a victim. The faster the identity theft is revealed, the easier it will be to erase the damage caused by the thieves.