Why It’s Important For Millennials To Check Their Credit Report Every Month
A credit report is something that summarizes your loan and credit card history. It includes the information about repayments, inquiries made, number of accounts, and so on. This information is used by the credit bureaus to calculate your credit score. This credit score is used by lending institutions to assess your creditworthiness when you apply for a loan or a credit card. So, it is essential to check your credit report every month. This is especially true for millennials who go in for many loans and credit cards. So, let’s read deeper and understand why it’s important for millennials to check their credit report every month.
What Are the Top Reasons To Check Credit Report Monthly, Especially For Millennials?
Gives an idea about credit score:
Checking the credit report will give people an idea about how their financial actions have affected their credit score. If any transaction or action has affected their credit score, they can take steps to improve it. This credit score is one of the most important factors used by financial institutions to approve credit applications. So, it is imperative for them to check their credit report, become aware of their credit score, enhance it, and maintain it as well. Within six months of checking their scores, 51% of millennials who had a score below 700 have enhanced their CIBIL™ score by an average of 65 points.
Helps to identify errors:
Banks and financial institutions provide information about borrowers to the credit bureaus when they apply for a loan or a credit card. Sometimes, there could be errors in the information given by the bank. The borrower would have never applied for a loan or credit card, but still, it could be entered wrongly in his name. His name could be misspelled, the loan amount could have been entered wrongly, or a defaulted payment could have been entered mistakenly against his name. All this will hurt the borrower’s credit score. The misinformation could signal fraudulent activity as well. So, it is mandatory for people to check their reports monthly and be aware of erroneous information. They can then file a dispute with one of the credit bureaus to get the mistakes sorted out.
Helps to know and improve other parameters considered for credit score computation:
The credit mix and the credit utilization ratio are some of the vital factors taken into account to calculate the credit score. Checking the credit report monthly and getting to know about these elements will help people take steps to improve them. For example, they could keep their credit card spending below 30% and make the credit utilization ratio good.
Helps to know about the best credit card and loan offers:
if people keep themselves updated about their credit score, they can come to know about the best credit card and loan offers in the market. Having a good credit score helps them get loans at lower interest rates. It makes them eligible for higher loan amounts, flexible repayment tenures, and better loan terms and conditions.
Millennials want better credit scores:
Millennials borrow more and should thus be careful about their creditworthiness. They vary significantly in habits and lifestyle from the earlier generations. They avail credit for both their living and ambitions. They enjoy buying luxury items, funding grand weddings, and taking vacations to exotic destinations. Probably today’s millennial generation faces more medical ailments, thus they borrow more to finance their medical expenditures. They invest in expensive degrees and entrepreneurial ventures to realize their dreams. So, they should vigorously seek information to manage their credit scores. That’s why it’s important for millennials to check their credit report every month.
How To Check Credit Report?
The 4 credit bureaus ideally give one credit report every year to their customers. So, people can give requests to the 4 credit bureaus in such a way that they can obtain at least one free report per quarter. So, they can get a free credit report from each of the bureaus yearly. They can also visit various online financial websites that allow free credit score checks and free report downloads. This continuous monitoring will improve one’s financial life.
It is important for everyone to check their credit report regularly, especially the millennials who do not hesitate to take loans and credit cards. They require excellent credit scores and have to take steps to improve and maintain them. Errors that pull down the credit score can be eliminated by checking the credit report regularly. According to the CIBIL ™ report, millennials who self-monitored their reports regularly had an average CIBIL score of 740, which is higher than the non-millennial average of 734.
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