Your credit score is an assessment of your financial responsibility. If you have a good credit score, lenders may feel more confident about lending you more money at lower interest rates. But if you have a bad credit score, you may find it harder to successfully apply for credit.
If you don’t know your credit score, it’s easy to check. Here are three reasons why you may want to do so:
You can see yourself how lenders see you
Your history of borrowing and repaying money is collected by credit bureaus and used to generate your credit score. When you apply to borrow money, lenders will check your credit report to help them assess your application. Some credit products have a minimum credit score as an eligibility requirement – for example, a low-interest car loan may only be available to borrowers with excellent credit.
Accessing your own credit report can help you work out which loan products you can realistically apply for. For example, if you know you only have an average credit score, you can avoid applying for products that require an excellent score, and avoid having rejected credit applications on your credit file (which could risk lowering your credit score further). And if you know you have an excellent credit score, you may be able to use this knowledge to your advantage when negotiating with a lender.
You can fix mistakes
Unfortunately, inaccurate information sometimes finds its way into your credit history. These could be simple errors from financial institutions, or you may be the victim of fraud or identity theft. These inaccuracies can lower your credit score, making it harder to successfully apply for loans.
If you find an error on your credit report, you can contact the parties involved to set the record straight. This can help to quickly improve a bad credit score, which may allow you to more easily access credit products with lower interest rates, lower fees, or more flexible features and benefits.
Credit bureaus such as Equifax and Experian will usually let you order a free copy of your credit file once every three months. You’re also entitled to a free copy of your credit report after you’ve had a credit application rejected, so you can get a better idea of why your application was declined. Credit bureaus may also offer paid access to your credit report plus additional information and tools.
Alternatively, you can order a free credit report via RateCity to gain access to information from both Experian and Equifax, and receive updates when new information is added to your credit report.