Your credit plays a big part in your financial life, which is reason enough to monitor it carefully. Taking a more active approach to checking your credit reports comes with many other benefits, as well.
The Importance of Your Credit Score and Reports
Your credit score is calculated using information in your credit reports. These files are compiled by TransUnion, Experian, and Equifax – the three major credit bureaus in the US. Think of them as your financial report cards, with your credit score acting as a sort of grade point average.
Your credit determines your ability to get approved for mortgages, auto loans, credit cards, and other credit lines, as well as the interest rates and terms you’ll qualify for. The influence of your credit doesn't stop there – it can also affect your auto insurance premiums, as well as your ability to get a job, rent a home or apartment, get utility services, or even qualify for a cell phone contract.
Since credit can affect your finances and life in so many ways, you'll want to keep a close eye on it.
Benefits of Monitoring Your Credit
Outside of it affecting your ability to qualify for loans and credit, there are several other reasons you'll want to keep tabs on your credit. Here are a few:
- It's Free and Doesn't Affect Your Credit – Taking an active role in monitoring your credit is free and easy, giving you little reason not to do it. You're entitled to a free copy of your credit report every 12 months from each of the major credit bureaus. You can request these at www.annualcreditreport.com. And, despite what you may have heard, checking your own reports doesn't hurt your credit score.
- You Can Better Understand Your Credit – When you understand the information in your credit reports, you can gain a better idea of how it works. With that understanding, you'll be better at coming up with ways to improve your credit management skills.
- Find Errors to Dispute – It's smart to monitor your credit reports regularly so you can look for errors or inaccurate information. You're allowed to dispute incorrect information on your credit reports, and the credit bureaus are required to investigate. They'll remove or correct the errors, allowing your reports to accurately reflect your credit profile.
- Identify Signs of Fraud – You can also look for signs of fraud or identity theft. While looking at your credit reports, look for accounts you don't recognize, or information that doesn't belong to you. Take action immediately if you spot any red flags. Keep in mind that a credit monitoring service should be able to quickly identify suspicious activity.
The Bottom Line
Taking a more active approach to credit monitoring is a great way to better understand your credit, which can help you along the path to improving it.
If you're looking for options to improve your credit but also need a car, an auto loan is the perfect solution. Not only will you get the vehicle you need, but by making all your loan payments, you can rebuild your credit at the same time.
Auto Credit Express can help you get connected to a local dealership even if you're dealing with less than perfect credit. We work with a nationwide network of dealers that are equipped to handle many types of credit situations. Start the process by filling out our free, no-obligation auto loan request form today.