The importance of your credit score can not be denied. Lenders look at your score when you apply for a loan like a mortgage or car loan, utility companies may run your report along with your landlord, and even some employers run your credit which is still something I can’t wrap my head around.
The use of your credit score is quite simple; people want to know that you’re a reliable borrower and you pay your bills on-time each month. Just telling someone about your good financial habits is not good enough if you want a complete stranger to trust you and offer you money or a service.
Your credit score can help prove how financially responsible you are. While your score should not define you, it’s important to play the game and properly monitor your score and report regularly so you can make sure all your accounts are in good standing and avoid any unwanted situations like delinquent accounts and theft.
I use Credit Sesame to monitor my score which is a free resource I found from this Credit Sesame review but before I explain how it works, I wanted to give you a little background on my experience with credit in the past
My Brief History with Credit
I’m still in my 20s so my credit is still evolving over time, but I feel like I have a pretty high score (over 750) and I’ve pretty much done everything I could do to improve and maintain my score. My credit profile didn’t start out peachy keen however.
I grew up hearing my parents talk about credit all the time and how it didn’t really help provide them with any opportunities because their scores were bad and they didn’t keep up with some of their accounts. I heard warnings from a few other people not to get any credit cards when I turned 18 because they would ruin my score. I later found out that that advice was extremely false as long as I used a handful of credit cards properly and controlled my spending.
When I was 17, I opened a bank account with a guy I was dating and he deposited a $150 check to help me open the account. I withdrew the money shortly after and spent it, never thinking anything of it. I ended up moving out of the area that year after I broke things off with the guy. When I was 18, I tried to apply for credit cards and kept getting denied.
I used to sign up on sites that promised a ‘free credit score or report’ but in reality, it was a short free trial and I always got charged and pressured to join as a member which was pretty annoying. After finally checking my score and report on a trusted site, I saw that it was extremely low. I had never used credit before so I couldn’t understand why.
As it turns out, I had a delinquent account with the bank I opened an account at when I was 17 because the check that was deposited had bounced and I owed the bank that money. I suppose the bank tried to reach me several times by calling a disconnected number I had or sending letters to my old address, but I literally had no idea so they must have gotten tired and sent my account to collections.
I was crushed after finding out that this foolish mistake would be on my report for years and I quickly paid the account off. My credit score was shot though, and I couldn’t get approved for even the worst cards on the market for a while, plus banks didn’t trust me and I had to get a 2nd chance checking account with my current bank for 2 years.
I learned a lot from that experience even though I was young and made a naive mistake. Nowadays, I check my credit often because I know worse things can happen, like identity theft. With Credit Sesame, they have quite a few great features that I love.
Credit and Debt Analysis
After you sign up with Credit Sesame and answer a few brief questions to confirm your identity, your profile will be created and you’ll receive a full analysis of your credit and debt every time you log in. The system pulls information from all your accounts and can generate your utilization and debt-to-income ratio. The letters they use to analyze your credit profile just make up the credit factors that go into determining your score.
Alerts About Changes
Credit Sesame monitors your credit and can send you alerts if there are any sudden changes including any new inquiries that show up. This feature would have been great for me when I moved and had no idea what was going on with my bank. Since I never closed the account and simply stopped using it, I should have checked in on my situation, but it’s nice to receive updates and reminders as well since life can get busy and it’s easy to forget things.
Identity Theft Protection
This is one of my favorite features because identity theft doesn’t discriminate. It can happen to anyone no matter where you live, work or shop and it can even happen to children. Credit Sesame offers identity theft insurance for $50,000 for U.S. residents to help cover the cost of replacing documents, traveling expenses, lost wages and any other expenses incurred if you ever have your identity stolen.
This is a great feature to utilize since we all have financial goals. Instead of spending money on a financial coach, you can enter in your goals to build your credit, save, pay off debt, or purchase a home right through your Credit Sesame account and track them. With all of your accounts and your credit score connected, it will make the process much easier.
The Best Use of this Resource
Credit Sesame is best for tracking your score and the factors that affect it, setting goals, improving your score and protecting your identity. If you don’t know your most up-to-date credit score or don’t have a monitoring system in place already, I’d highly recommend signing up for a free account with Credit Sesame. While they don’t show your entire credit report for free, you can upgrade your account or use AnnualCreditReport.com to print off a free copy of your report each year.
When was the last time you checked your credit score? What strategies have you used to build it over time?
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