Personal finance is an incredibly important aspect of life that needs to be controlled effectively if you want your money matters to run as smoothly as possible. While you may budget each month and put money aside for a rainy day, financial wellbeing involves much more than that and should ideally include a credit check every once in a while, too.
You can find your credit rating here to get more of an insight into your finances and where they can be improved. The question you may be asking is: why should I check my credit rating at all? Well, while many people neglect to do this as part of analysing their finances, checking your credit score can be incredibly beneficial and can give you a more rounded look at every aspect of your personal monetary situation.
When checking your credit report, you need to remember that you are seeing exactly what potential lenders see when you apply for finance of any description. Whether you’re hoping to be granted a credit card, store card, personal loan or a mortgage – whatever the type of finance you’re after – a lender will want to take a look at the state of your credit history.
With this in mind, here are some top reasons why you should examine your credit report on a regular basis:
You can see what you owe, and to whom
Whatever outstanding credit you have – whether it’s your mobile phone, store cards, utilities or your mortgage – you will be able to see exactly what you owe and to whom you owe it. A credit check provides the convenience of seeing a clear picture of your finances without having to check every bill individually.
What this can sometimes highlight is outstanding credit (note: this does not mean outstanding debt) that you have but either don’t use or have forgotten about completely – this might include old credit cards that you have switched away from but not formally cancelled. With this credit still technically available to you, lenders may be wary of offering you more on top.
You can decide whether to apply for finance
Every time you apply for credit, whether accepted or declined, it leaves a mark on your credit report – and being declined can be seen as a black mark. Don’t apply for finance without checking your credit history and seeing whether you meet the lender’s criteria first.
Applying for, and being declined, credit on several occasions within a short time frame can give the appearance of desperation so try to spread your applications out wherever possible so that these negative marks do not become a major factor on your credit file.
You will have a better idea of why you may have been declined finance
By checking your credit report, you will be able to see what the lender sees when they are deciding whether or not to lend to you. If you’ve been declined credit, you will be able to see why and, in future, you can try to improve your financial history to better your chances of approval.
Knowing why you were declined also puts you in a better position to apply only for those products that are suited to your circumstances whether that be a credit building credit card or a guarantor loan.
You can use it for contact details
If you’re moving home or your circumstances have changed, the sure-fire way of finding the contact details for all of your lenders will be to check your credit report.
It’s handy because you can access your previous addresses too – any address you’ve lived at over the last 6 years will be on the file; ideal if you need to fill in forms and you can’t remember your previous postcodes!
You can keep an eye out for fraud
No matter how careful you are with your personal data, there are criminals out there who would like nothing better than to assume your identity so that they can apply for credit in your name.
One of the most useful things about having immediate access to your credit file is that you can keep a vigilant eye out for such identity theft and fraud. Often you will spot things on your credit file before more direct evidence comes to light.
You can check as often as you want to
Unlike finance applications, checking your credit report won’t damage your record. Lenders can’t see how many times you’ve checked your report, either.
It’s a huge advantage to be able to see what the lenders see. With the help of a credit check, you’ll be able to see where improvements can be made that deliver more stable personal finances. Not only can checking your credit report help to improve your chances of being accepted for finance, but it will also help you to manage your finances more effectively.