Four Reasons To Check Your Credit Score Today
It could be thinking about starting your own business.
Perhaps you want to get into a position to own your own first home.
Maybe your car is coming to the end of it’s lifespan and you will need to buy a new one soon.
Whatever scenario life throws at you, keeping on top of your credit score by requesting a free credit report is absolutely essential. If your credit score is low, it can have a massive affect on many areas of your life. So, if you have no idea what your score is, here are some powerful reasons to check it today.
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Contents
#1- It Could Save You Thousands
All of us need to borrow money at some point, and the interest rate we pay is directly linked to our credit score.
If you have a bad score, you will be completely ineligible for some loans and credit cards, and are only likely to be able to borrow at a very high rate of interest. This may only seem like an abstract matter of percentages, but it can add up to thousands of pounds over the time you’re paying it back.
It’s also worth keeping in mind that having no credit history at all may be as bad as having a poor one – it’s all about how much of a risk or an unknown quantity you seem to be.
Each lender has their own criteria about where they draw the line, but you can research what you should be paying in interest for a loan or a credit card, based on a particular credit score.
Make sure that you translate the percentage interest rate into dollars of interest – seeing the figures written down in black and white makes it easier to understand the financial impact.
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#2- It Could Get You A Job
OK, so no-one is going to get a job based just on their credit score alone, but many people don’t realize that it can be an important deciding factor, or even that some employers do a credit check.
If it comes down to you versus another candidate for a job interview, but you have a poor credit report, who do you think will get offered the job? An employer wants to know that you are reliable and able to manage things responsibility, and a bad credit score is an indicator that all might not be well in that area.
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#3- Cheaper Car Insurance
Car insurance is one of those necessary evils in life – no one really wants to pay it, but we all have to. That said, your credit score has a large bearing on the cost of your car insurance premium!
In fact, US studies into the matter have found that people with no credit history can pay more than double what people with a good score do, even with the many other deciding factors taken into account.
#4- Making Improvements
You can improve your credit score by getting your personal finances in order. Consider taking these steps:
Action Steps To Consider
- Create a budget, even if that budget is simply on notebook paper.
- Separate your expenses between fixed and variable, and take a hard look at your variable spending.
- Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
- Consider using a budgeting app to monitor your spending
- Save 5% of your monthly gross income
Improve Your Finances, Increase Your Credit Score
Monitoring your score closely means that you can prevent minor issues from becoming large problems, and also save money on your insurance costs. Life really is cheaper with a better credit score.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(amazon author page) amazon.com/author/kenboyd
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/