Value of Free Credit Scores

YOUR FREE CREDIT SCORE IS IMPORTANT

Why is getting your free credit scores such a good idea? Because it contains data that affects every facet of your everyday life – including where you reside, what kind of car your drive and the amount of money you are able to save for your children's education. Learn more reading credit reports.

If the information listed on your credit report is favorable, then you know your current credit practices are good and you should proceed in the same manner. However, if your credit score/rating/info is mediocre or worse, then you will need to make some adjustments in your routines and credit behaviors.

Even if you think that you are not going to need to use any credit in the immediate future, it is very possible that your position will change sooner than you think or want. For example, your current means of transportation may get stolen or breakdown which would equate to you having to buy a new car or motorcycle. Do you have enough money in the bank or are you going to need to take out a loan? What if you decide that you are sick of living in an apartment and want to buy a house or condo. That will likely equate to needing a mortgage.

If you don't take care of your credit, you will have a very difficult time getting approved for any sort of financing. And if you do get approved, you will likely end up paying much more for your loan in the way of interest rates. How come? Because the lower your credit score is, the higher your interest rates are going to be. Lenders reward positive management of credit and money with more favorable loan terms (lower interest rates and higher borrowing amounts). That is their way of trying to appeal to borrowers that are low credit risks.

Borrowers that are smart will always select fixed rate loans. As we know, thousands of Americans are in the process of having their homes foreclosed because they made the mistake of choosing adjustable rate loans.

Assume the following: If you purchase a home for $300,000 and pay 6% interest, you are going to be looking at around $18,000/year interest, or $1500/month. If you purchase the exact same home house and pay 8% interest, that first year's interest would be $24,000 – or $2,000 per month. Think about all the different things you can do with an additional $500 to spend or better yet save!

If you think that you are in a good position with your credit because you pay your bills on time every month, you may not be. It really will depend on how much credit you are using. The more you extend yourself, the lower your credit score is going to be. Learn more about the effects of having bad credit.

It is very likely that your credit report will have errors on it. In fact, according to CBS, 4-in-5 credit reports have errors! It is crucial that you review your free credit score thoroughly to ensure that your info is accurate. If it is not, you will need to take the steps needed to fix your credit report. In addition, it is very important to make sure that all your open accounts are in fact yours. If you see accounts present that you never opened, it is very possible that you are a victim of identity theft.

Bottom line, if you don't stay on top of your credit, your scores can get destroyed very quickly. That is why we suggest you get a free copy of your credit report today!

Related Reading:
The Impact of Inquiries on Your Credit Score
Credit Report FAQ
What is a FICO Score?
How Are Credit Scores are Computed?
Why You Should Run Your Credit Report Once a Year

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