It’s easy to forget about your credit score until you need it. When it comes time for a loan or credit card application, you don’t want to be surprised with a rejection because you didn’t know that your credit score has gone down since the last time you checked. Most people do not check their credit scores regularly, if at all. Some are deterred by the misconception that checking will ding them some points. There are several reasons why everyone can benefit from checking their credit score. Here’s why your credit union should encourage members to check theirs.
Maintaining Credit Scores
Like anything, ignoring a bad credit score will not make it go away. Improving a credit score can take quite a bit of work. It may take months or sometimes years to get it where it needs to be. The only way to improve and maintain a credit score is by staying on top of it. Monitoring it will allow members to make changes to get or keep the credit score they want. Then when it comes time to apply for a loan or credit card, there will be no surprises.
Understanding What Hurts and Helps Credit
Monitoring credit consistently will help members understand what actions affect their credit score. Whether positive or negative, it’s good to know what factors impact scores, especially preceding a loan or credit card application. For example, opening a new credit card can hurt credit in some cases, and knowing that in advance will help members make more informed decisions.
Responding to Changes
In the same vein as the point above, monitoring credit will help members react to changes in their credit score more quickly. If a member learns that their credit score increases after paying their account balance in full, they’ll be more inclined to do so consistently. Knowing the reactions of different actions helps members anticipate changes in their credit score, and makes them more prepared for major applications.
Ensuring Information is Accurate
Checking credit scores regularly also helps to ensure that the information listed is correct. If someone with an excellent credit score finds their score has suddenly dropped 200 points overnight, this might indicate there’s some inaccurate data within their report. According to credit.com, 1 in 5 Americans find an error in their credit report. Staying on top them will help identify errors, and prevent huge headaches in the future.
Knowing When New Offers Are Available
Once a good credit score is maintained, opportunities for added perks should arise. Members with a good credit score will be able to apply for credit cards with higher limits, and more benefits. An improved credit score can also help members negotiate better rates on their existing credit card. Members who consistently check their credit score will be able to find opportunities to save cash, bank airline points, and more.
Checking your credit score doesn’t have to bring fear and dread. When maintained and monitored properly, members will be able watch their score climb and sit comfortably at the top. There are many services that allow members to check their credit score for free without any hits to their score. Tri-Town Teachers FCU took this one step further. Rather than just encouraging members to check their score, they provide their members with free access to their FICO® Scores through their secure digital banking services. They even include the top factors affecting their scores, and offer comprehensive credit education.