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Why you should know your credit score
Your personal credit score is one of the most important pieces of information in your financial profile. And since it’s such a powerful tool for building your economic future, we can’t emphasize strongly enough how critical it is for you to know it and protect it.
Just as your credit score gives potential lenders insight into your spending and payment habits, knowing it can also be tremendously beneficial to you. For example, we don’t always anticipate the large purchases we end up making. When it comes to buying a house, people usually plan and save for it well in advance. But when that house’s furnace suddenly gives out or a storm sends a tree crashing through the roof, we’re often caught financially unprepared. When
you know your credit score, however, you can rest a little easier.
A good personal credit score – which is generally considered to be somewhere between 650 and 750 – can help you get a loan for this kind of emergency or open a credit card so that you can be ready for unexpected expenses when they arise. If your credit score isn’t particularly good, though, a bad situation can quickly get a whole lot worse.
Knowing your credit score isn’t just in your interests when you’re dealing with lenders. Regularly checking and knowing your credit score can also help you keep track of your finances and ensure that everything is the way it’s supposed to be. For instance, if you have one credit card, a home with a mortgage and always make our payments on time, your personal credit score should ideally be somewhere in the good to excellent range.
But let’s say you check it and discover that it’s dropped below that 650 mark. Understandably, you wonder what could’ve caused such a decline. And while the reason could be something as inconvenient but ultimately fixable as a clerical error, a significant change in your credit score could also be a serious warning sign of identity theft or
fraudulent activity involving your checking, savings, investment or credit card accounts.
Knowing your credit score and checking it frequently is one of the best ways of keeping this from happening to you.