Have you checked your credit score lately? Monitoring your credit score is crucial since it impacts your overall financial wellness. While you may think you have a good credit score, you might be surprised to learn that your score has decreased when you are unexpectedly denied from making a big purchase. Your credit score may also determine the rate you get on a loan or the premium you pay for insurance.
Here are three reasons why it’s essential to keep a close eye on your credit score.
1. Know What is Impacting Your Score Changes
As you close and open lines of credit, experience balance changes or other credit activity, it causes your score to fluctuate. Consistently monitoring your credit, allows you to understand what’s causing the changes and have a pulse on your score to modify your behavior to maintain and improve a healthy credit score.
2. Fraud Prevention
One great way to protect yourself from credit fraud and identity theft is to regularly monitor your credit. When scammers gain access to a person’s credit information, they might try to open lines of credit in the victim’s name. By monitoring your score each month or even setting up alerts with a credit monitoring service, you can flag these applications and stop fraudsters in their tracks.
3. Catch Mistakes Made by Creditors
Everyone makes mistakes – even your financial institution or lender. On occasion, a lender may inaccurately report something to the credit bureaus, such as your loan showing a missed payment. However, by providing documentation to your lender showing confirmation of payment, or on-time payments you can correct any erroneous information impacting your credit score. You’re more likely to catch these mistakes when you’re keeping a constant eye on your credit score.
Now that you know why monitoring your credit is so important, you’re probably curious about how to get started.
- Find a Reputable Credit Monitoring Service - There are many large credit monitoring services out there like Credit Karma, where you can pay a small fee to monitor your credit. Many financial institutions also offer their own monitoring services typically free for their customers like Northeast Credit Union. We offer free-for-members credit monitoring services as a part of Digital Banking. Not enrolled in Digital Banking? Enroll now.
- Set up Alerts - Set up alerts through the monitoring service you choose and receive notifications when your credit is pulled or a new line of credit is opened. This way, you can catch attempted fraud or credit bureau reporting mistakes right away and avoid negative impacts to your credit score.
Whether your credit score is great or less-than-ideal, it’s important to know where you stand. Staying on top of your credit score is the best way to ensure that all your credit information is accurate and gets you on the right path to maintaining or building a healthy credit score.