Everyone should check their credit scores at least twice a year, and here’s why:
1. Planning major purchases: Whether it’s buying a house or a car, knowing your credit score beforehand is crucial. For homebuyers, a score below 700 could complicate getting a mortgage. Aim for a score above 720 for the best terms. For car buyers, if the dealership charges more than 3% interest, your score might be too low. Knowing your score helps you negotiate better deals or decide if it’s the right time to make that big purchase.
2. Refinancing: If you’re considering refinancing your mortgage, check your credit score first. You don’t want surprises like a forgotten late payment to derail the process, which can be lengthy and frustrating.
3. Managing credit cards: If you’re thinking about a new credit card but know you won’t pay off the balance each month, your credit score will dictate the interest rate you get. High rates can trap you in debt, especially if your score is low because you’ll get much higher rates.
4. Keeping business honest: When borrowing for significant expenses, your interest rates will depend on your credit score. It’s essential to know your score to ensure you’re not being overcharged.
5. Protecting your identity: With the rise in identity theft, regularly checking your credit score can alert you to issues before they escalate. If someone steals your identity, they could max out your credit quickly and move on to the next victim.
6. Preparing for marriage: If marriage is in your future, it’s wise to know where you and your partner stand credit-wise. Joint financial plans can be severely affected by one person’s poor credit, so it’s best to address any issues well in advance.
Regular monitoring: Even if you’re not planning any major financial moves, keeping an eye on your credit score is a good practice. It helps ensure your financial health and keeps you prepared for the unexpected.
Why check your credit score? It’s not just about getting loans. It’s about financial awareness and security in a world where your credit score affects many aspects of your life. Monitoring your credit can save you from headaches and financial heartache down the line.
