4 Reasons to check your credit score - Why you should monitor credit score ?

4 Reasons why you should monitor your credit score :

•     Reporting Errors
•     Identity Theft
•     Financial Infidelity
•     Progress Report

A credit report is a detailed document that contains a consolidated record of your finances. Credit bureaus like Equifax, Experian, and TransUnion maintain this record. They evaluate your financial information to calculate your credit score, which is a numerical score that decides your creditworthiness.

Reasons Why You Should Monitor Your Credit Report :

Reporting Errors :

Credit report errors are quite common. Your card-issuing company might make mistakes while filing your report with the credit bureaus. It is also possible that the credit bureaus make errors while consolidating your overall credit report.

Identity Theft :

Have you heard about credit card fraud, scams, data breaches, and identity thefts? Sounds scary, right? An imposter could steal your personal information, such as Aadhaar and PAN, driver’s license number, date of birth, or other financial information and use it for their own financial gain. These are serious crimes that can not only affect your finances but also ruin your credit history.

Financial Infidelity :

Infidelity indicates a breach of trust. There have been those unfortunate situations wherein a person was betrayed by a trusted or loved one. Don’t be surprised. Incidents like this have become quite frequent, and many people suffer although it is not their fault at all.

Progress Report :

Checking your credit report gives you clarity and aids you in planning your finances well ahead. Your credit report tells you exactly how much you owe to whom and by when you need to settle the amount. If you are in debt, you get to know about the total amount and also track your monthly progress in resolving the debt.

What is good Credit Score ? - 4 tips for good credit score

Fix Your Credit Utilization Ratio

You should keep your credit utilization ratio within 30%. If you notice that your expenses are exceeding 30% of your credit limit, your credit scores will inevitably drop. Consider increasing your credit limit in such a situation.

A higher credit limit automatically brings down your credit utilization rate, provided that your expenditure or credit balance remains constant.

You may call your credit card issuing company and request for an increase in the credit limit or make an application online.

You could also get another credit card for the same purpose. However, increasing your credit limit isn't a piece of cake, and you might have to go through a rough road.

Once you successfully manage to improve your credit limit, spend carefully - your expenses must not increase.

This will balance out your credit utilization rate, and a low utilization rate boosts the credit score.
Don’t Apply for Too Many Credits Simultaneously

Hard inquiries deduct points from your credit score. If you apply for too many lines of credit at a time, each will amount to a hard inquiry.

These hard inquiries remain on your credit report for quite some time. Many hard inquiries at a time will not only reduce your credit score but will also make you seem quite desperate for cash.

Hence, lenders will not be able to trust you. So whenever you apply for credit cards, spread the applications apart over a long period.