When was the last time you checked your credit score?
If you’re anything like the average American, it’s been a while … or you never have. But according to New York-based certified financial planner Anthony Canale, a quick credit score check “is really a simple thing that people can do for themselves, that doesn’t cost any money, that really helps them to determine what their credit looks like.”
Credit-rating agencies compile both positive and negative financial information about you to determine your score. “If your score is very low, then when you go for a loan or when you go to rent a car or … an apartment, the people will be very leery,” Canale said.
How does your credit score impact your life?
Your credit report will typically be reviewed by a prospective landlord or rental agency. Your credit score also influences auto loan rates available to you.
Additionally, cell phone companies will check your credit score before deciding to grant you a service plan. And we all know that when you apply for a new credit card, the company will review your credit score to see if you qualify and what terms you should receive.
If there’s incorrect negative information on your report, it’s a good idea to try to get it removed. That’s a quick way to improve your score and increase your immediate chances of getting a lower mortgage rate or even that job or apartment you want, he noted.
“In any credit transaction, there’s really you, who’s looking to borrow money; there’s the creditor or the lender, who’s looking to lend you money; and then there’s this pesky third party that is the credit reporting agencies,” said Canale. “They … monitor the information from the lender to the borrower and see how well you pay your bills.”
That information is then sold to employers, landlords and financial institutions.