A credit score is essentially a grade we are given which informs potential lenders about our reliability as a debtor, and the score is typically between 300 and 850. A score that exceeds 700 is seen to be reliable and in good-standing, and anything higher than 800 is considered excellent. However, a score below 600 suggests you may not be a reliable person to lend to. In the United States, most people typically have credit scores of between 600 and 750.
Achieving a good credit score grants you financial flexibility and freedom, and will help you to secure loans, credit cards, and mortgages. Furthermore, having a stronger credit score can afford you more opportunities, such as lower interest rates on your loans or credit.
By hiring the services of a credit repair agency or looking into credit repair attorney costs, you can benefit from the professional services of those who are trained to help you get your credit score where it needs to be!
Should You Avoid Checking Your Credit Score?
One question that is frequently asked is whether checking your credit can have a detrimental effect on your overall score. The short answer to this question is no–contrary to popular belief, checking credit scores does not lower them. However, this depends on the type of credit inquiry conducted. There are two types of credit inquiries to note: hard and soft.
A hard inquiry is when a lender requests a copy of a person’s full credit report to assess their creditworthiness. A hard inquiry can affect credit scores because it is an indication that a person is actively seeking credit.
On the other hand, a soft inquiry is a less severe form of credit inquiry. Soft inquiries occur when a person checks their credit score or when a lender checks it for pre-approval purposes. Soft inquiries do not affect credit scores.
We encourage regularly checking your credit report, and here’s why:
Identifying Inaccuracies
Checking credit scores regularly can help identify errors. It is not uncommon for a credit bureau to report a late payment that a person has already made, for example. If you know how often your credit score updates, you can also do this at corresponding intervals so you can address issues immediately.
Avoiding Identity Theft
Identity theft is a very real and common problem. Hackers can gain access to your personal and financial information, and use it to gain credit. Checking credit scores allows you to detect signs of identity theft early on. If you notice unauthorized activity in your credit report, you can raise the alarm, which may result in learning how to freeze and how to unfreeze your credit.
Planning Ahead
Checking credit scores in advance can help with planning personal finance. Let’s imagine you wish to apply for a loan six months down the line–checking your credit score now can help you adjust behaviors and boost your credit score.
Tracking Progress
Checking credit scores regularly allows you to track your credit progress. You can monitor your payment history, credit utilization rate, and credit report accuracy to ensure you are making progress towards a robust financial standing. Making payments on time, keeping credit utilization low, and having a diversified credit history reflects healthy financial behavior which, in turn, increases your credit score.
In Conclusion
Checking your credit score will not lower it, but can actually have significant advantages and provide important insights into your financial status. We recommend checking your credit score regularly so that you have added control of your financial life and can take action, should anything seem amiss.