If you’ve just graduated college and are getting ready to embark on a new career, there’s no doubt it’s an exciting time in your life. Your financial future is just beginning to take shape and there are several things that you may be looking at doing, including making some big purchases such as buying a new house or car. It’s important to take a good hard look at your credit report now to prevent any surprises before you go to the bank to request a loan. Both now and in the future, here are just some of the reasons why it’s important to keep close tabs on your credit score and report.
More Job Opportunities
Nowadays employers delve into a more complex search as they determine if you’re a good candidate for a job position. While you can have a lot of work experience and schooling that fits the criteria, another thing an employer may explore is your credit report. If you have an extensive payment history that is negative or you have a prior judgment or bankruptcy, your employer may view you as irresponsible and non-credit worthy. This can impact your hiring, especially if the position is in the public eye or a part of the financial sector. That’s why it’s imperative to check your free credit score prior to applying for a new job. Make sure your credit report shows no negative accounts or balances. You should also work on paying off as much debt as possible.
The Best Interest Rates
According to Experian, the average credit score ranges between 300 and 850. The higher the number, the better your score or creditworthiness. When you keep your credit score high, you’re setting yourself up for some of the best interest rates on the market. When you acquire a low credit score, your payment is lower throughout the terms of your loan agreement. This allows you more buying power when it comes to:
- *In-store credit and revolving credit accounts
- *A home mortgage
- *A new vehicle purchase
- *Obtaining reasonable rates on auto, homeowner’s and life insurance
Keeping your credit score high allows you to achieve financial freedom and raises your clout level with financial institutions.
Preventing Identity Theft
When you keep track of your credit score periodically, one of the things to look for is new credit card accounts. If you have random accounts that are new and go delinquent within 30 days, there is a good chance that they are unauthorized. Identity theft affects over 17.6 million annually just in the United States alone. Misuse of personal information can lead to someone stealing your name and running up a hefty debt in a matter of hours or days without your knowledge. Checking your credit report monthly and having a credit monitoring service to notify you of suspicious activity is a good way to prevent a problem from growing out of control and damaging your FICO score.
Easy Credit Terms
If you’ve had bad credit in the past, you may be familiar with cash advances or payday loans. These types of instant cash loans are good if you’re in a bind for money, but paying them back can take months and start the cycle of continual fees and more payday loans. Break the cycle with obtaining a personal loan from your bank with easy credit terms. As your credit score improves, you’re more apt to qualify for a good short-term loan with low-interest rates, no fees, and a low monthly payment. Keeping tabs on your credit report and FICO score frequently to check for discrepancies and credit cards reporting late payments, will allow you to rectify credit errors before it affects your credit score long term.
By checking your credit report regularly, you can become more in tune to how and when your credit card companies report your payments. Knowing to make timely payments and request help when needed will help keep your scores high and your credit lines open and available for future purchases.
James @ Credit Zeal says
Great article Pauline! It still amazes me how many people don’t truly understand the significance of their credit score and the impact it will have on their entire life. It’s actually one of the most important three digit numbers in your life and you need to look after it. If you do unfortunately suffer from a bad credit score then you can either pursue the “do it your self” path or you can hire a professional credit repair service. Either way, as Pauline mentions, don’t neglect your credit score.
This is a fantastic article.
There are so many benefits of having a good credit score.
Thanks for sharing this.