Not knowing your credit score could be harmful
Are you among the 37 percent of adult Americans who admit that they do not know their credit score? That’s right, according to the National Foundation for Credit Counseling’s 2009 Financial Literacy Survey in April 2009 more than a third of Americans have no idea what their credit rating is, and what they don’t know could come back to haunt them.
Many people are afraid to find out their credit score because they expect it to be worse than it really is. However, not knowing your credit rating is probably causing more worry then knowing the truth. Without requesting your credit score you’ll be in the dark until you find out that the bank has refused your request for a loan for that new car or home you want to buy - what a way to find out!
Having bad credit isn’t the end of the world, but not knowing about it could be quite harmful. The main reason is that you can’t fix what you’re not aware of. If you don’t realize that your credit rating is bad, chances are you continue to act in the manner that you always have and continue to dig yourself deeper into dept while further diminishing your credit rating at the same time.
However, if you bite the bullet and discover what your credit score is, you may be pleasantly surprised that it is nowhere near as bad as you think. Even if your credit rating isn’t quite where you want to be, you’ll at least know what has to be done and you can start gaining peace of mind by taking action to reduce your debt and repair your credit right away.
Repairing your credit may not be easy, but it’s worth it so that you can regain your financial freedom. The first step is to eliminate most of the credit cards that you own. Did you know that the average consumer today has a total of 13 credit obligations with nine being credit card payments (according to myfico.com)? While getting rid of the credit cards is a good start, other good option is debt restructuring which allows you to minimize the amount of creditors that you have to deal with. Realize that your credit rating will likely get worse before it gets better, but it’ll be easier to manage and recover from debt this way. Start making regular payments within 30 days, even a partial payment is better than none at all and just take one day at a time. Keep at it until you can again consider applying for bank loans and always think long and hard before ever incurring further debts.
Even if you know your credit score is exceptional, it’s still a good idea to periodically check up on your credit rating. Routinely looking into your credit score will often allow you to catch identity theft fraud before it’s too late. You can access your free credit score report once a year from each of the major credit monitoring bureaus in the United States: Equifax, TransUnion and Experian. These are the same companies that the banks deal with, so you’ll be able to keep tabs on your credit score, ensure your records are accurate and up to date and be less at risk to being caught unawares by identity theft.
These are some great reasons why all Americans should find out their credit rating and work to maintain a good credit score.