Your credit score is vital to your financial well-being, yet so many of us don’t even know what it is.
Keeping track of it is important, especially if you’re at a transition point in your life. For example, a divorce never results in a decrease in spending — the opposite is true. Having a line of credit may prove indispensable in bridging the spending gap between married and divorced life.
Good credit works in your favor in more than one way. Applying for loans requires hard inquiries into your credit score to see how trustworthy you are with borrowed money. Companies also use your credit score to determine important things like how much interest to charge you or how high your insurance premiums should be.
For consumer credit there are three reporting agencies:
Credit scores are usually within a few points across the different agencies. Their usefulness lies in the once-yearly, free credit reports Congress has obliged them to provide to Americans. It’s possible to time it so that you get a free credit report every four months. I call it Total Credit Situational Awareness. Or at least I do now.
It’s worth checking out your score if only because being credit invisible is arguably worse than having bad credit.
Actively taking care of your finances, paying off bills, and optimizing your credit cards will help your credit score begin its upward trajectory. Contact us for more information.
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