Many people depend on credit to handle emergencies or to make major purchases. A question we frequently hear from people is “How important is my credit?” The answer is that it’s very important. Your credit profile can influence your future ability to take out loans or open a new credit card account at the best rates.
You may not realize that your credit profile is also used by insurance companies, landlords, cell phone companies, and some employers. If you don’t take care of your credit, you may be turned down by these companies or you may have to pay a larger deposit than someone with good credit. Since your credit score and the information on your credit report affect so many things, it’s extremely important that you take care of your credit.
Things That Can Harm Your Credit
Your credit report provides a financial picture to the world. It lets people know how well you’ve handled borrowed money up until now and gives them an idea of whether it would be risky to loan money to you.
One credit misstep can quickly bring down your credit score. The biggest thing that can bring down your credit score is making payments late. A single bill paid more than 30 days late can make your score drop and serves as a red flag to potential lenders. Your score can drop even more if you become seriously past due and end up in collections, or if there are other negative marks on your credit report such as bankruptcy, foreclosure, or judgments against you. Borrowing more money than you can pay back is another red flag to potential lenders.
Protecting Your Credit
If you’ve taken good care of your credit up until now, keep up the good work. Make sure you always pay your bills on time. You might want to consider having your bills paid through automatic draft so that there’s no chance you forget to make a payment. Try to keep the balance on revolving accounts below 30 percent of the available amount. Pay your balances in full whenever you can. Avoid applying for new credit too frequently.
Check your credit report at least annually. Consumers are entitled to a copy of their credit reports each year from AnnualCreditReport.com. Take the time to look at what’s being reported, and make sure there’s nothing on your credit report that’s incorrect. Errors on credit reports can include wrong balances, wrong payment status, and duplicate items. Or, you may even find one or more accounts that don’t belong to you.
Dispute Credit Report Errors
Any errors you find on your credit reports should be disputed promptly. Partnering with Dovly is the easiest way to get misinformation removed from your credit report. Dovly is an AI credit engine that can help you to track, manage, and fix your credit. With our help, you can rest easy knowing your credit report is showing only accurate information, which gives you the buying power you deserve. Try it risk-free with our free membership tier.