Keeping a regular check on your financial health is crucial in understanding your current credit score status. This is particularly significant if you are considering making substantial purchases in the near future. Even if you have no immediate plans for large spending, it’s beneficial to be aware of your financial profile. This provides the opportunity to make improvements and ensure your financial security hasn’t been compromised. Here are some effective ways to monitor your credit and overall financial health.
ANNUAL CREDIT REPORT
Initiate your financial health check by obtaining your free annual credit report. While most credit card firms provide a credit score, they do not provide a comprehensive credit report. It’s necessary to get this report each year to verify its accuracy. Since the three major credit reporting bureaus (Equifax, TransUnion, and Experian) depend on reported information, errors may occur.
Hence, your role is to cross-verify that all information is accurate. Looking through these reports keenly is essential because discrepancies can be found in at least one of the reports.
KEY POINTERS
Essential aspects to look out for in these reports include:
– Maiden and married names
– Present and previous addresses
– Outstanding amounts to creditors
– Proper listing of creditors
– Correct listing, such as “pays as agreed” or “late payments”
If you find inaccurate data, you can dispute it for further investigation.
To get your credit score, consider using Credit Sesame. It gives you your credit score and also reveals factors affecting your credit score. It has proven beneficial when we found incorrect data on our credit report.
DEBT
When you pull the credit report, you will see all present and past creditors. It will also show if you:
– Paid as agreed
– Make timely payments
– Are delinquent
Scrutinize this thoroughly as it can significantly impact your credit score and overall financial health.
CREDIT CARDS
Review your credit card status next. If you currently have credit card debt, refrain from using those cards till you repay the debt. This prevents you from accruing more interest fees.
BUDGET
After identifying your debt, formulate a budget. Decide the method of repayment if you have any outstanding debt. Try to repay your debt as swiftly as possible to ease the financial burden.
At the same time, focus on building your emergency fund as part of your budget. This might seem challenging but it’s critical for your financial well-being.
FINANCIAL HEALTH
In conclusion, awareness of your credit score status is crucial. While it may not be the ultimate determinant, it gives an indication of your financial health. Obtain your annual credit report, verify its accuracy, and concentrate on clearing your debt and building your assets like your emergency fund.
Personal Capital is an excellent app for continual monitoring of all of your accounts and progress. There are ample resources nowadays to help maintain your financial health, so make use of all that seem helpful.
What are your preferred methods of routinely checking your financial health?
