How to Monitor and Control Your Credit Score

Your credit score is an important part of your financial identity. Everything, from credit card to cash loans to mortgages, shows up on your credit report. It’s important to keep an eye on your score because it determines how much you can borrow, at what interest level and with what kind of security.

Do you know how to monitor and control your credit score? Here are a few tips.

Request a credit report

It’s good to request a credit report from companies such as Equifax at least once every ten years. Not only can you see your entire credit history, but you can also get a glimpse of what banks see when you request a new loan, margin or mortgage. It also lets you correct any errors that might have appeared on your report and that may negatively affect your score.

Depending on the level of depth, credit reports can go from cheap to costly. Get an entry-level report if you just have the basics: credit card, car loan, mortgage. If you have investments or several debts, you might want to get a more in-depth report.

By requesting a credit report before making any big financial change in your household, you ensure that you have all the knowledge you need to make an informed decision and negotiate with the bank.

Pay your bills on time

The first step towards controlling your credit score and keeping it high is to pay your bills on time. It might seem obvious, but too many people default on their payments. One late bill can happen, but regular late payments can quickly turn a good score into a credit nightmare.

If you realize you’re late, pay the bill as fast as you can and don’t skip another payment. The longer you stay on time after a late payment, the better your score will be. You can correct a bad payment history by being diligent with your bills.

Avoid maxing out your credit cards

Maxed out credit cards can have a negative impact on your score. Try to pay everything you charged at the end of each month, plus a little extra if you’re carrying a balance.

The lower your credit card balance, the better your credit score.

Oh, and don’t use a credit card to pay another credit card: it will show on your report and hints at bad financial management.

If in doubt, consult a financial professional

If you find yourself in an untenable credit situation, consult a credit counselor as soon as possible. You can avoid years of anxiety over debt collection calls if you work on a plan early and keep to it.

A bad credit score can be remedied with hard work and sound financial management. Don’t let credit cards and other consumer debt control you. Take control of your own credit by monitoring your credit score and doing everything you can to keep a good score. Be responsible and don’t take on more credit than you need.

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