Why it is important to monitor your credit?

The health of your credit report is directly correlated to your overall financial well-being and hence staying up-to-date on your credit reports and scores is extremely important.

1. Your credit reflects your overall financial health
There are several reasons to check your credit report regularly, but the first, and most important, is that being knowledgeable about the state of your credit report is a fundamental part of being an informed consumer. If you’re not checking your credit, you can’t truly know where you stand financially. However, a little proactive monitoring can help mitigate credit issues before it’s too late.

2. Regular checks can stem identity theft
Identity theft is one of the most pervasive crime. By monitoring your credit report, you are establishing a crucial first line of defense against identity theft. The sooner you can spot a case of identity theft, the more likely you are to prevent extensive damage.

When your personal information is exposed to someone who intends to exploit your finances, the potential negative implications are endless. An identity thief basically has a blank cheque in your name and will spend it as selfishly as they choose.

Negative impacts of a bad credit score

A credit score is a measure of your credit worthiness and a good score demonstrates that you have acted responsible enough with credit, so you can be trusted again with credit. However, having a bad credit score leaves many negative impacts.

1.Rejected loan or credit card applications
Your credit score is one of the first and foremost things that is taken into consideration when you apply for any loan, as it is considered as a direct indicator of your credit worthiness. It also signals your likelihood of repaying the loan. So, no lender would like to lend to an individual with a bad past of dealing with credit. This would surely be the case when you approach traditional lenders like the banks.

2.Higher rate of interest
While some lenders may outright reject your application, there may be a few lenders who may still offer to lend to you in-spite of a bad credit score. To compensate for their increased risk in lending to you, they may agree to lend at a higher rate of interest.

3.More number of hard enquiries
With a bad credit score, you may need to apply for credit more often to fulfill your need, with unfavorable terms of credit adding to your woes. Each time you apply for credit and your lender pulls out your credit report from the bureau, it is considered as a hard enquiry. Each hard enquiry, irrespective of the fact if the credit is approved or not, takes your credit score further down. So, a bad score only gets worsened.

4.Emotional distress
Barring a few individuals, most of us apply for credit when we need it. Credit rejection when you need it the most causes financial distress, which in turn contributes to emotional distress too.

A bad credit score affects you in more than one way, knowingly or unknowingly. Do not give identity thieves a chance to hurt your credit score. Invest in best credit protection program, like Cyberior Digital Identity Protection and protect your financial reputation.