These days, a credit score isn’t just a random number floating in the ether. It’s an important part of your financial portfolio, so much so that it can often be the make-or-break moment in your application for a mortgage or credit card. This number gives potential investors a simple way to process your probability of defaulting on a loan. Because of this, it is important to know as much about your credit health as possible before applying for financial assistance.
The easiest way to monitor your credit score is with a free credit check. This simple process lets you monitor your credit health while also checking for signs of identity theft. It can also give you peace of mind, knowing your financial status is secure and trending in a positive direction as you plan for that big, life-changing purchase. Follow these simple tips for keeping up with your credit score while avoiding common pitfalls.
Know What You’re Checking
A credit score is a combination of several different factors that rates your credit risk. It helps lenders determine, among other things, the terms of your agreement, interest rates, or whether they will even lend to you in the first place. These factors can include:
- Types of open accounts under your name (credit cards, mortgages, auto loans, etc.)
- Amount of size of any outstanding balances
- Length of credit history
- Frequency of applications for new credit accounts
- Payment history
Taken together, these factors give lenders a good picture of your financial health.
Avoid Credit Scams
Like so many things in this world, getting a credit score can be far more perilous than it needs to be. Getting a credit check through certain services can unwittingly sign you up for credit monitoring services. These services start off free and offer something that seems worthwhile: the opportunity to track changes in borrower behavior. This can provide a multitude of benefits, like notifying the borrower when their identity may have been stolen. What they don’t tell you, however, is that these services aren’t as free as they claim.
Plenty of websites claim to offer free credit scores. Once you sign up for these websites, however, they begin charging monthly fees if the service isn’t canceled within a certain amount of time. This length can be as short as 7 days and is not readily advertised by these websites. While the Federal Trade Commission attempted to put an end to these practices back in 2010, companies found loopholes and continued their practices, charging as much as $30 a month for credit monitoring. Without due diligence, it can be easy to fall for these scams.
Do Your Research
With so many nefarious sites looking to take advantage of the unwitting, it has become more important than ever to ensure the credit score website you are using can be trusted before handing over your information. Luckily there are plenty of trusted websites with above-board practices, many of which are free.
By engaging with a trusted website offering free credit reports, you can periodically check up on your financial health at your own pace. Rather than paying for a service that gives you reports whether you requested them or not, you can simply investigate for yourself at key moments, such as before a large purchase or opening a new line of credit. This can give you a good idea of where you stand and put yourself in a good position to haggle over key aspects of any contract you may end up signing.
Ultimately, good financial health is one of the most important practices to master in this modern world. By knowing what you’re checking, avoiding scams, and doing proper research, it’s easy to know where to turn for a free credit check.