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Why You Should Know Your Credit Score

Ask Savvy: Do I Really Need to Know My Credit Score?

This excellent question was posted by lemonfizz in my Ask Savvy group: I check my credit reports regularly for errors, but I've never paid extra to find out my credit score because I don't have any plans to take out a mortgage or buy a car (I live in the city and rent). Is there any other reason I'd need to know my credit score?

To see my answer just

The reason you need to have a good credit score is so that you can qualify for the best interest rates for things like homes and cars, but also for credit cards. Even if you’re not in the market for a new vehicle or a new abode, your credit score should still be on your radar.

Your credit score is the biggest indicator of your overall financial health, and when your credit score is generated the credit bureau running the report identifies reason codes. These reason codes are what you should be paying attention to — they tell you what the reasons are for any dings in your score.

While you’re not in any rush to borrow any time soon, attending to the reason codes now will allow you to borrow more cheaply when you’re ready to make a bigger purchase or require additional credit. So, if your reason codes are telling your credit to debt ratio is too high, you can work on getting that ratio down so that you get the best interest rates when the time comes. For now, you can treat checking your credit score like getting a physical — you just want to know you're doing everything you can to be financially healthy.

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nancita nancita 7 years
Good to know about the reason codes. I was not familiar with that at all!
cvandoorn cvandoorn 7 years
I use Bank of America Privacy Assist...it provides me with identity theft protection as well as my credit score. Unfortunately its only updated every 3 months...it would be nice to see how my credit is affected by certain things immediately. Instead I have to wait 3 months to see the changes.
hmcmcd hmcmcd 7 years
if it is past due by 30 days then it will show up on your credit report. But if you are only 15 days late it will not show up. That doesn't mean you still won't be charged a late fee, just that it won't end up on your credit report. I am completely crazy about checking my report and score. I subscribe to get my updated report each month. There is a fee, but it is piece of mind for me. I just like to know what I'm walking into and where I stand in terms of negotiation.
RosaDilia RosaDilia 7 years
I checked mine last month and my score is 732 which made me very happy since I'm considering buying an apartment by the end of this year. And yes, bad payments stay on the report. In 2002 I missed a couple of payments on a department store card and it's listed on the report by by the number of days missed.
Liss1 Liss1 7 years
I have been so good over the last five years trying to pay everything off to make my credit better. I have noticed that my credit score keeps going up and up a little every month - i have a credit card through Providian and their website tells you what your score is.Is it true that bad things stay on your report for 7 years? I got myself into credit card hell 5 years ago but have not been late since, so i am hoping eventually that will dissapear, because it embarrasses me that i let myself get into that situation.
Liss1 Liss1 7 years
I have been so good over the last five years trying to pay everything off to make my credit better. I have noticed that my credit score keeps going up and up a little every month - i have a credit card through Providian and their website tells you what your score is. Is it true that bad things stay on your report for 7 years? I got myself into credit card hell 5 years ago but have not been late since, so i am hoping eventually that will dissapear, because it embarrasses me that i let myself get into that situation.
princessjaslew princessjaslew 7 years
i know i should check my credit...but i don't dare to! i have a feeling i'll get depressed just seeing the numbers!
SkinnyMarie SkinnyMarie 7 years
I haven't checked mine either. I really should, my life has just been crazy!
Shopaholichunny Shopaholichunny 7 years
Good Question. My mom always bugs me about this but I have never even checked my score yet. I still live w/ my parents and I have no bills so I don't see why I should check it yet.
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