What Are the Advantages of Knowing Your Credit Score?


Quick Answer

Knowing a credit score allows a person to know in advance what the potential is to get a good loan and a favorable interest rate. Also, errors or uncertain items can appear on credit reports, and knowing a score allows a person to check on such issues, reports Investopedia.

Continue Reading
What Are the Advantages of Knowing Your Credit Score?
Credit: Sean MacEntee CC-BY-2.0

Full Answer

Companies can submit reports to a credit reporting bureau without a consumer even being aware of the issue, reports Investopedia. Knowing a credit score and keeping track of it ensures individuals are aware when there is a significant decline or gain in the score. Recognizing a sharp drop allows that person to check in and possibly correct a major problem.

Knowing a credit score and details in the report are critical to improving credit, states MyFICO. Even when there aren't issues on the report, a person can only improve upon an existing score by knowing what factors led to the poor score. If late payments are a clear problem, for instance, the consumer knows that improving consistency in making on-time payments is vital to improving a score going forward. Borrowers also get a chance to see the balances reported to lenders on a credit report. Keeping balances low relative to available credit is important to maintaining a good score, according to Investopedia.

Learn more about Credit & Lending
Related Videos

Related Questions