Your credit score, also known as a credit rating, might seem like something you only need to check if you want to get a loan or a mortgage but there are other reasons why you should check your credit score on a regular basis. The process is simple to do and can spot several problems before they escalate.
A full overview of your record
Whether you are borrowing or not, having a full overview of your own credit record is a good idea. It can include a range of accounts such as utility bills, mobile phone bills and shopping catalogues as well as the traditional bank loans, mortgages, and credit cards. It can allow you to see what you owe if you need this information for any reason without checking various statements and websites.
Understand what your credit record means
Your credit score impacts more than just how much you can borrow. It may affect whether you are able to get a certain job. For example, as well as verifying your right to work, or carrying out a Disclosure & Barring Service check, potential employer may carry out a credit check before you’re offered a position. If you have a poor credit record or having problems showing on it, some employers may decide against employing you.
Improve your credit rating
By knowing what your rating is now and what any problems are on it, you can begin to plan for the future. Say you want to buy a new car next year or want to move house in two years’ time. By understanding the bad points on your credit rating, you can see what you need to do to improve it and therefore increase the chance you get the best loans or mortgage rates. There are lots of good ways to improve your credit rating but you need to understand what it is currently before you start.
Spot identity theft
More and more people are experiencing the unpleasant situation of having their identity stolen online – often in the form of credit cards or debts taken out that they know nothing about. Monitoring your credit rating can help you spot something that you haven’t applied for and stopping the process before it gets too out of hand. This step is recommended by the Home Office and means you can contact the bank, lender or provider to report the theft immediately.
Lenders sometimes make mistakes, allocated a balance to a cleared account or putting a debt to the wrong person’s details. By studying your credit rating, you will spot these mistakes and have them corrected before they affect your borrowing or your chances of getting the job you want.
There are a number of easy ways to check your credit rating so it doesn’t need to be expensive or difficult. It is definitely worth doing to spot those problems and also to help understand your own position to plan for the future. And spotting identity theft is best done as soon as possible to stop those thieves causing you real problems.