Why Do I Need to Know My Credit Score?

Why do you need to know your credit score? Your credit score plays a much larger role in your financial life than you might realize. While many people don't even consider it, knowing your score is the first step to improving it. Here are five reasons why it's important to know your credit score. It could make all the difference in getting the loan you need or getting the interest rate you want. Listed below are some tips to get a better credit score.

Your credit score reflects your payment history. This is the single most important factor. It accounts for more than 30% of your overall credit score. Missed payments hurt your score. Another third of your score is based on how much debt you currently have. This ratio is known as your credit utilization. Aim to keep your credit utilization ratio under 30 percent. A low credit utilization ratio can lead to a higher score.

Lenders use credit scores to determine who should extend credit to you. While length of credit history is a positive, it doesn't guarantee a high score. In addition, your FICO score takes into account the mix of your credit and whether or not you've made any new credit in the past year. VantageScore, on the other hand, uses slightly different factors and weights them differently. It also uses trended data to determine your creditworthiness.

There are many reasons to check your credit score. Your credit history will tell potential lenders whether you're a good risk to lend to. Lenders can legally request your credit report from the three credit bureaus, Experian, Equifax, and TransUnion. A higher score means better loan terms. So, make sure you read your credit report carefully before applying for a loan or credit card. In addition to checking your score, make sure that your financial history is in order.

Your credit score is important if you want to get the loan or apartment you need. Oftentimes, an applicant's credit score will be checked by a landlord or employer when they are looking for a new apartment. A lower credit score can mean the landlord has to demand a larger security deposit. It's also important to know your credit score for employment purposes. If you're not careful, you could lose a great opportunity to secure the apartment you want.

Your credit score is calculated based on information in your credit report. Credit scores can vary every day, based on what information is reported to the credit bureaus. This is why you should check your credit report at least once a year. If there's any inaccurate information, you can dispute it. You can also check your credit score for free through some of the many websites online. And don't forget to read the fine print and make sure you're getting all the information you need.

Keeping your credit score in a healthy range is also important, as a high credit score can help you get great deals and loans. Low credit scores mean high interest rates on credit cards, requiring a higher deposit to secure a loan, and paying more on utilities. Keeping a healthy mix of accounts is also beneficial, as lenders want to see that you're able to handle different types of credit.