It’s an important step in building and maintaining good credit, so here are some less obvious benefits that may also help you maintain your credit reputation and help you reach your financial goals.
Decrease the Impact of Identity Theft
Credit Savvy provide members with a free credit file monitoring service.
For example, if someone uses your identity to apply for a credit card without your knowledge, they will let you know. If this ever happens, you should contact the credit provider and address the situation as soon as possible. Get on the front foot and start the process of having the incorrect information on your credit file removed. You may even be able to cancel the card before the identity thief has the chance to activate and use it. It probably won’t be a great experience, but when it comes to identity theft, the sooner you can act, the better.
Stop a Late Payment Becoming a Default
A common problem that can trip people up and end up hurting your score is late payments. A late payment can happen for any number of reasons, and sometimes it’s simply because you have lost track of your repayments. If you happen to change address or go travelling, you may not be aware that you have received a bill that needs to be paid.
Now that Comprehensive Credit Reporting has come into effect, late repayments will be reported on our credit file. By monitoring your credit file, you will be more likely to realise if you have missed one and can take immediate action before they become defaults. Remember, a default is recorded on your credit file if your payment of $150 or more is overdue by 60 days or more and is kept on your credit file for five years, even after the amount has been repaid.
If you’ve never checked your credit score or your credit report, you don’t know what’s on there. Most of the time people will find that the information is accurate, but mistakes do occur. For example, your credit provider could have recorded two enquiries instead of one.
Before you apply for credit, you want to make sure your credit score and credit report are in tiptop shape. An error on your report could hurt your chances of getting approved. Have an error on your credit report summary? Find out how to fix it here.
This article was originally published on Credit Savvy in 2018.