Time to Check Your Credit Score

If you have a well-functioning brain, you know how important your credit score can is, and how it helps/hurts you. The higher your score, the lower the interest rates you will receive for credit cards, loans, etc. It is becoming even more important than ever as employers and landlords are starting to ask for this information.

Most people do not know their credit score, and it’s something everyone should know. Only one in five consumers check it annually, which shows their payback patterns to banks and other lenders.

For those one in five, they are often surprised by their findings. Sometimes there is an old bill at the bottom of your desk you forgot to pay, and after a few months it was sent to collections and is now showing up on your report.

Even the tiniest of bills that go unpaid can leave a big mark on your credit score.  Unpaid traffic tickets, utility bills, overdue library book fees, and medical expenses are examples of little things that often go overlooked and end up penalizing you in the end, as much as 100 points. For the average life of a 30 year loan, this one mistake could potentially cost you as much as $9,000.

Credit takes quite a while to build, so it is always worth your time to keep a watchful eye on your bills. Check your credit reports regularly at AnnualCreditReport.com. This site allows you one free report each year. When looking at your report, check it thoroughly for false credit card accounts, and payments that are marked as late, but weren’t.

Big mistakes in your report will cost your score significant points, which essentially measures your risk. If your credit scores tanks too low, it could cost you your loan application. If you find an error, notify your creditors and financial institutions immediately.

Delinquencies have the largest negative black mark on your credit score, because your payment history accounts for a significant 35% of your score. Pay them in full!

If you aren’t capable of paying them in full, you can always attempt to negotiate a payment plan with the collecting agency. If they agree to settle, make sure this is writing, and ask them to reflect this on your credit report. Old delinquencies will vanish from your report after 7 years.

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