What Is A Credit Score, And Why Should We Check It Once A Year?

Importance of credit Score

Importance of credit Score

If you find it difficult to understand what is credit score then think of it as your health report, which your doctor writes for you after you pass the medical checkup. So, in a similar context, Credit scores are just a three-digit numeric representation of your credit health, typically ranging from 300 to 900.

Credit score holds a huge significance in our loan approval possibilities. Typically, it is just proof of an individual’s credibility, which helps the lenders to gauge their loan repayment tendency.

A healthy credit score can open doors to all your financial problems without letting you cut off the spending and exhaust your savings as per your requirements. To fuel your dreams, it’s important to have access to vigilant credit risk. In simple words, checking your credit score once a year plays a vital role in your future loan approval chances and inquiries. Also, not only does it promote your chance of getting a loan request approved, but it also makes your impression strong as a borrower on who lenders can trust. Now let’s move ahead and see what all perks it has to offer.

Checking your credit score once in a while benefits you in multiple ways. Let’s have a glance at some of the advantages we get:

Check your credit score

Analysis of your credit actions is clear.

Making a pros and cons list or limiting your budget is not enough to understand the pattern but also to observe your credit score can describe a lot about your transaction activities. This way, you’ll know whether your actions are helping or harming your credit score. If you know what can lower your credit score, you can avoid it and get better offers on personal loans, house loans, and other types of loans when you need them, making room for only essentials when needed the most.

It keeps you out of trouble.

You could become a victim of identity theft, resulting in a credit score reduction if you come across accounts that aren’t yours. So you should resolve the situation as soon as possible. This can happen in multiple ways. For instance, when your credit score drops unexpectedly or when you see a significant decline in your credit score, it’s time to review your credit report. This could be the result of identity theft or a credit reporting error. Hence, checking on your credit score keeps you alarmed with such suspicious mishappenings.

Whether to get a loan with affordable interest rates or check your credit score, you may take help from a Buddy loan for a 100% safe and transparent process for a better user experience.

Also Read : A Detailed Guide On The Crucial Tips And Tricks To Improve Your Credit Score!!

It allows you to build a stronger credit score. 

Who does not require a good credit score to qualify for a loan request? But for that, one needs to build a credit score by making timely payments of credit card bills and past loans or debts. However, this can only come into realisation by visiting your credit score to have a look so that you can fix it if it is poor or bad.

Because we know, a poor credit score might sometimes be the result of an error or inconsistency in your credit report. If this is the case, you should contact the credit agency in question and your bank right once to have it fixed. Checking one’s credit score is considered a soft inquiry and has no bearing on one’s credit score. Only serious questions about your report will be asked by potential clients.

It gives scope to rectify mistakes and errors.

Incorrect account information, like credit account data or duplication of the same loan or credit card account, may be found on your credit report that might have crept unintentionally can also be rectified. In general, under some circumstances, your credit accounts are mixed up with the information of another person, lowering your credit score. To avoid this, a timely check on your credit score can be a great help either to correct or edit some new changes, etc.

Also Read : Confused About What To Know When Checking Your Credit Score? Read Through This Article To Learn More.

It opens doors to better credit options. 

You can uncover better credit card or loan offers available in the market if you know your most recent credit score. A high credit score improves your creditworthiness and allows you to obtain more loans at better rates. In other words, when applying for a loan, it offers you negotiating leverage. Only hard credit inquiries performed by prospective lenders/credit card issuers when you apply for new credit impact your credit score.

Conclusion

If you want to enjoy the rest of your time worrying less about your credibility, then start checking on your credit score at least one time a year. You can obtain a pre-approved loan and credit lines using Buddy Loan to check your credit score. It will assist you with your financial issues and answer all your queries in no time, finding you the best option available.

FAQs

  1. What is a good credit score?

A good credit score nominally lies anywhere between 600 and 900, with 900 representing maximum creditworthiness. However, 750 or above in the score graph is ideal and will help you qualify for loans and credit card applications.

  1. How to build or maintain a strong credit score?

Maintaining a healthy credit score can help you secure a loan more quickly. It is essential to have a strong credit score of 750 or higher. Here are a few tips to help you:

  • Since credit history and loan repayments have the greatest impact on your credit score, paying all of your bills on time should be a priority.
  • To maintain a decent credit score, keep your credit utilisation percentage at 30% or as low as you can. It is also preferable to have a solid balance of secured and unsecured debt.
  1. Does repetitive checking of credit score degrades its value?

No, looking up one’s credit score is a general inquiry that has no bearing on their credit score because continuous credit score checking has nothing to do with its value degradation. Regularly checking your credit score will assist you in keeping track of your financial activities.

  1. Are there any charges required to check the credit score?

There are no hidden charges or fees applied to check your credit score. As a part of a general query, it is served free of cost almost at every platform, convenient for people.

  1. Where can I check my credit score?

You can check it for free at any website of a bank or non-banking financial institution NBFCs. Moreover, there are several mobile applications to visit which will ask you to provide a few details to verify your accounts and will display your credit score without any hassle within a few minutes.