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Why it’s important to check your credit score

What does your credit score do for you?

02 March 2022Lloyd Smith 2 min read
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Check your credit score today

Check your score and get tips to improve it. It’s free, forever.

See your score

Your credit score… the secret number used by credit providers like banks and credit card companies is now available to check for free! Why check your credit score? Your credit score is one of your most important financial assets and the gateway to many important milestones in life, such as your first car, your first home and even your first mobile phone plan. So, it’s important to guard it wisely. This means it’s essential to regularly check it.

Your credit score is a number between 0 and 1,000 that tells businesses that extend credit like lenders, phone companies, credit card companies and energy businesses about your financial history. The higher your credit score is, generally the better your track record paying your debts and bills.

The information used to figure out your credit score comes from your credit report. This is a record of your credit history put together by credit bureaus that includes information like:

  • Whether you pay your bills and debts on time. (payment history)
  • Any instances when you have not paid your debts. (defaults / missed payments)
  • How many credit cards and other loans you have. (accounts opened / closed)

Checking your credit score is really easy with ClearScore and it’s also free. Here are three reasons why its important to know how your credit score is calculated to improve upon it:

You might find mistakes when you check your credit report, which negatively affects your credit score. Sometimes a lender will have recorded a debt that’s not yours on your credit report. Or you could find some of your personal information is wrong, for example your name could be incorrectly spelled. So checking your credit report gives you an opportunity to correct any mistakes.

All too often, fraudsters steal people’s identity, open up credit cards or take-out loans in their name, and start racking up debts. If you don’t know this has happened, you may get a nasty surprise when you go to take out finance to buy a home, car or personal loan and find someone has assumed your identity and damaged your credit history. Checking your credit report will allow you to find out if this has happened so you can tell your lenders and also the authorities.

If you know what your credit score is, and you want to improve it, this gives you the opportunity to take steps to do this. For instance, you can ensure you always pay your bills and debts on time and in full. You can also use your credit card and always pay it off before the end of the statement period, which positively affects your credit score. Repeatedly applying for credit – for instance by applying for a number of credit cards at the same time – can also reduce your credit score. This is because it can appear to lenders that you have an urgent need for credit. So, making sure you’re not applying for credit when you don’t need it is another way to maintain your score.

As you can see, checking your credit score and credit report is hugely important. So why check your credit report now through ClearScore and find out how you stand in eyes of lenders.

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Written by Lloyd Smith

General Manager AU

Lloyd spreads the word about how awesome ClearScore is.