Staying on top of your credit score is essential to ensuring that you continue to build your credit. This can be done by getting your credit report and using the information that you find in it to know what area of your credit has room for improvement.
What is a credit report?
In a nutshell, a credit report simply reveals how responsible you are when it comes to paying your bills. It displays payment history, debts that you currently owe, and how long your credit has been active. Every time that you apply for a credit card or a loan, the lender will look at your credit report to determine what kind of risk they’re facing if they finance you.
Some of the most common things that are found on a credit report are any accounts that you haven’t paid which have been sent to collections, repossessions, and whether you have filed for bankruptcy in the past. By knowing what’s on your credit report beforehand, you can better understand what kind of financing options you might have available to you.
The Benefits of Obtaining Your Credit Report
Knowing the benefits that you can reap from getting your hands on your credit reports could provide you with the insight you need to improve yourself financially. Below are the top 3 benefits that you can take advantage of.
· Determine whether certain financing options are available to you.
Credit cards, loans, and mortgages all come with a set of requirements which usually means that you need to have a certain credit score in order to be approved. There are three different credit bureaus (Equifax, Experian, and Transunion) which means that the credit score a financial institution looks at could be any one of those. If you run your own credit report, you’ll know immediately whether you need to improve it or if you’re going to be able to get your hands on the financing that you need.
· Identify mistakes within your credit report so that they can be disputed.
Sometimes errors do happen, and it is quite common when it comes to certain entries made on credit reports. If you get your report, you can quickly identify any errors that might be made and file a dispute so that they can be taken off your credit instead of having a negative impact.
· You can see what debts you can pay off immediately.
If you want to be on the road to financial freedom, this is definitely the start to doing so. You will be able to see all of the debts that you owe and make an educated decision as to which ones you can afford to pay off first. The more debts that you end up paying off, the more responsible you’ll be seen by financial institutions.
One of the best ways to stay on top of the happenings of your credit report is via credit monitoring services. This will provide you with a real-time look at your credit and many of these services will even provide you with alerts. Don’t underestimate the power that taking this simple step can have on your financial status.