Why it is so Important to Track Your Credit Score

happy couple checking credit online

Tracking your credit score is one of the most important financial diagnostic tools you can use. You can think of your credit score like a thermometer. Much like a thermometer measures your physical health, a credit score measures your financial health and your creditworthiness. And just like a thermometer, your credit score can’t diagnose your problem — but it can tell you that there is a problem.

Why Tracking Your Credit Score Matters

You might pay more for new credit – Lenders use credit scores as a tool to not only determine whether a customer is creditworthy, but also to determine how much interest that customer should pay. Lower scores present more risk to the bank, so they pass that risk right back to you in the form of a higher rate on home and car loans, credit cards and personal loans.

You might pay more for insurance – Insurance companies are also using credit scores to determine your level of risk, and in turn will charge you more. Many states allow credit scores to be used as a factor in determining premiums because credit scores can be linked to increased claims.

You may be denied a job – Did you know that over 60% of employers are checking credit before they hire an employee. Having a poor credit history can prevent you from getting that dream job.

Credit will impact where you live – Looking to rent an apartment? Be aware that most rental companies and landlords require a credit score check along with income verification and other financial documents that indicate your financial responsibility.

Large drops in your score are a red flag – your credit score is going to change from month to month, but what you need to watch out for are large changes in your score, particularly to the downside. Large drops in your score are a red flag that something negative has happened on your credit file. You need to get a copy of your credit report to determine exactly what the issue is.

Monitor for fraud – Identity theft is a huge problem these days. Monitoring your credit  can alert you to problems that could be a result of identity theft.

Achieve your personal and financial goals – Certain personal and financial goals, like buying a car or a first home, are tied to your credit history and score. If you don’t know your score, you’re leaving everything to chance and have no idea what to expect when you apply. Don’t leave it to the lender to fill you in — knowing your score can help plan to meet your goals so that you know what to expect going in.

Set a goal for your credit score – A good credit score can save you money, so why not set goals for you credit score? There are many common-sense steps that you can take to improve your credit score, but in order to know if they are working, monitor your score over time.

Monitor Your Credit Score for Free

You can monitor, manage and protect your credit and identity — all for free, with  CreditSesame.com. Get your truly free credit score monthly, plus free credit monitoring and free identity theft protection – no credit card required, or trial periods. And, find out how much you can save with a mortgage refinance, low interest credit card or other loan option with Credit Sesame’s debt analysis tools.


You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published July 27, 2011 Updated: February 18, 2016
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