Understanding what a credit score means can be really confusing. Even though that is a legitimate and straight forward question, sometimes the answer isn’t the same, but I will do my best to make things as easy as possible.
A credit score determines how responsible you have been in handling your open credit accounts and debts. When you are applying for loans, it is very important that you keep your credit score in good standing because it shows that you are able to be responsible with your finances.
How Often Should You Check
As important as it is to know where you stand in terms of credit, you should ideally try and check it via a soft inquiry every 90 days or so. Not only will this keep you informed as to what is actually on your credit profile, but it will also help you identify an errors that you don’t recognize.
The sooner that you can spot an issue, the quicker you can fix it and avoid any possible potential harm later down the line.
Make sure to verify everything from your residential address to the balances on each account.
To Dispute or Not
In checking your credit, if you find something that you do not recognize, you need to know whether or not it is worth disputing.
Disputing something on your credit with the credit agencies will help you fix any errors in a reasonable time-frame since the creditors must oblige to your request within a specified amount of time.
Get a Copy of Your Credit Report
Getting a free copy of your credit report for your records is crucial in understanding what is on your credit profile.
You can either do this online and each year you are allowed to get a free copy.
By doing this, you can get a glimpse as to the breakdown of your financial profile and getting with a finance professional to review it is always advised in the event you do not know what everything means.
Where to Go From Here
By taking a few of these tips, hopefully it has helped you understand what a credit score is made up of.
You should always be looking for ways to improve your credit score, and the more you understand your financial picture, the faster you will be on the right track.