When was the last time you checked your credit? If you can't remember the last time you took a peek at this three-digit number, you wouldn't be alone. Most Americans go for months without checking it, while nearly 20 percent of U.S. adults have never checked it at all.
When it comes to your financial to-do list, checking your credit score may not be at the top of the list. But you may change your mind after reading this. Here are three reasons why ignoring your credit is a mistake.
1. You're in the Dark about Your Creditworthiness
If you plan on borrowing money in the future, checking your credit is a great idea. What you see will tell you how easy the process will be.
Having a high score means you're in a good spot to borrow. Lenders will generally see you as someone who repays what they owe on time, so you'll likely have more options at more affordable terms.
A bad score, on the other hand, may shrink your options to short term loans like online payday loans for bad credit. If you can afford them, online payday loans may be a convenient source of cash when you can't qualify elsewhere because sometimes, you can't work on raising your score before you need to borrow.
When an emergency crashes into your life, you're on the hook for the bill, and time's ticking. If you're stuck handling an unexpected repair or medical bill, spare some time to compare a payday advance online with other installment loans for bad credit. This may help you find the best possible rates for your score and save you money in the process.
2. You Could Overlook Identity Fraud Until it's Too Late
Checking your credit does more than tell you what score you have - it also shows you why you have that number. Your report shows all the current accounts you have in your name, plus their account activity like age, payment history, and utilization if it's a revolving product.
Getting familiar with these details helps you spot something that doesn't belong. If you catch a line of credit or payday loan you didn't apply for, you may be the unwitting victim of identity theft.
Regularly checking your report will help you catch these fraudulent accounts early on, before your thief can do a lot of damage.
3. You Won't Notice Costly Errors
Inconsistencies in your report doesn't always mean you're a victim of fraud. There's also the chance that something went wrong when a financial institution shared your information with an agency.
Simple human error may be the culprit, or it could be a computer glitch in one of the many automated steps involved in generating your report. These mistakes could look like the wrong contact information or Social Security Number, duplicate accounts, or inaccurate information about one of your loans.
If you spot anything unusual in your report, get in touch with the agency that generated the report to sort it out.
Bottom Line: Start Checking
Experts recommend you check your report at least once every four months - you may want to check more often if you plan on shopping for a mortgage or installment loan. Luckily, checking is easy. Each of the major reporting agencies offers a free report every year. Order yours here to get started on making this a habit.