8 reasons you need to pay attention to your credit score

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Your credit score affects many important aspects of your life, from your personal finances to your ability to work and live where you want. Having a good credit score can also save you hundreds or even thousands of dollars on interest, insurance premiums, cell phone plans and more every year.

It pays to monitor your credit score on a regular basis so that you know where you stand. Here are eight reasons to pay attention to your credit score.

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1. It helps you qualify for a loan

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Lenders take a hard look at your finances before they extend a mortgage, auto loan, personal loan or other form of credit to you. They may review your income, the information in your credit report and your credit score. 

Your loan application may be rejected if your credit score is too low. It’s a good idea to monitor your credit score (and build your credit when necessary), to ensure that it falls within a desirable range. Learn more about credit score ranges here.

Image Credit: depositphotos.com.

2. You can get better credit cards

There are credit cards out there for just about every type of credit score. However, the better your score, the better the credit cards you can qualify for. If you want a premium credit card — or just a solid cash back rate with low fees — you’ll probably need your credit score to be in the good-to-excellent range.

Image Credit: depositphotos.com.

3. The better your score, the lower your interest rates

Your credit score doesn’t just help lenders and creditors decide whether to do business with you — it also helps them determine the interest rates that you’ll pay on their products. Generally speaking, the better your credit score, the lower your interest rates for loans and credit cards. Low interest rates can save you hundreds or thousands of dollars in the long run.

Image Credit: depositphotos.com.

4. You may be able to get cheaper insurance

Did you know that your credit score helps determine how much your insurance costs? Whether it’s car insurance or health insurance, people with poor credit tend to pay higher monthly premiums. 

Insurance providers don’t see the same credit score as traditional lenders. Instead, they look at a credit-based insurance score, which combines your insurance history with certain items in your credit report. Some states don’t allow certain types of insurers to use your credit score to determine their rates, so check your local laws.

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5. Negative items may appear on any credit report

A dip in your credit score is a telltale sign that a negative item has appeared on your credit report. This can mean that you forgot to pay a bill, have an account that went to collections or that you have declared bankruptcy. It could also mean that, due to an error or even identity theft, inaccurate information is wounding your credit file. (Here are a few other ways to tell if your identity has been stolen.) 

If the negative item on your report is legitimate, it’s helpful to know how it’s affecting your credit. If it’s incorrect, you should try to have it removed from your report as soon as possible by disputing it with the credit bureaus.

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6. You’re looking for your dream apartment

Landlords and property management companies often run credit checks on potential renters to avoid leasing to someone who may not pay up. While the fairness of this practice is open to debate, the fact remains that a poor credit score can prevent you from getting your dream apartment. If you know your credit score ahead of time, you can take steps to improve it before you submit a rental application.

Image Credit: depositphotos.com.

7. You’re on a job hunt

Some employers perform credit checks on job candidates before extending an offer. While they can’t check your credit score, they can (and will) pull your credit report (though they can’t see the same information that a lender or creditor could). 

Not all companies engage in this practice, and several states have laws that prohibit it altogether or limit how much information employers can see. However, it’s always a good idea to know your credit score and check your credit report before you begin a job hunt. You’ll have an idea of how you might look to potential employers that way.

Image Credit: depositphotos.com.

8. You’ll learn more about credit

Even if your aren’t planning to apply for a loan, take out an insurance policy or find a new job, it’s always good to be familiar with your credit score. You can look out for dips, watch it improve over time and be prepared the next time someone else is about to check it. 

You can pull your credit report every 12 months for free at AnnualCreditReport.com. These reports don’t come with your credit score — you can purchase them at the time for a nominal fee. However, you can also check your credit score for free each month on websites like Credit Sesame and via certain credit card issuers. 

Looking for more life hacks? Check out this list of 25 tools that can make life easier.

This article originally appeared on PolicyGenius.com and was syndicated by MediaFeed.org.

Image Credit: depositphotos.com.

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