If you’re interested in buying a car, or even if you’re simply trying to stay on top of your finances, your credit score – and your credit report – are very important tools. In this article, we’ll look at the difference between your credit score and your credit report, and some of the benefits you’ll enjoy if you check your credit report consistently, every year.
What’s The Difference Between A Credit Score And My Credit Report?
Basically, your credit score is calculated based on all of the items in your credit report. A credit score is just a simplified measurement of your overall financial health – but your credit report has detailed information about all of your credit accounts, inquiries, late payments, accounts in collections, and other such items.
There are many different free services that allow you to check your credit score, but you must often pay for your credit report. However, all Canadians are entitled to one free copy of their credit report per year from Equifax and TransUnion. Follow the instructions on the Government of Canada’s website to obtain your free copy of your credit report. You should do this every year.
The Benefits Of Checking Your Credit Report Every Year
If you haven’t been checking your credit report every year, you should start doing so as soon as possible. Here are just a few of the benefits you’ll enjoy if you start checking your credit report regularly.
- You can detect (and dispute) errors – Human errors are not uncommon, even among credit card companies, banks, credit unions, and collections agents. In many cases, there will be multiple errors on your credit report. You can dispute these errors, and if you have evidence to show that they are incorrect, they will be removed from your credit report, which can boost your credit score.
- You can see how your credit score is being affected by others – If you have authorized users on your credit cards, or you’ve co-signed loans with someone else, it’s possible that their late payments or other problems may be damaging your credit score. Your credit report will break down details about how your credit score is affected by these individuals.
- You may be able to detect identity theft and credit card fraud – If you keep an eye on your credit report, you can find out when identity thieves are opening up new accounts using your personal information – and you may be able to shut them down before they are able to use your identity to take out a loan or open up a credit card.
If you notice a suspicious credit inquiry for a credit card or a loan you don’t remember applying for, you can call up the responsible financial institution and inquire about who tried to open it. You can also cancel any credit accounts you don’t recognize. Doing so can save you thousands, and help you protect your personal information and your identity.
- You can be proactive about building a better credit score – Your credit report has all of the information about your financial history, so it’s the perfect roadmap to help you build a better score, and safeguard your financial future.
By taking control of your finances and building better personal spending habits, you can boost your credit score. In the long run, this can save you thousands of dollars on mortgages, auto loans, credit card interest, personal loans, and even on car insurance, in some cases.
Check Your Credit Report Every Year (Did We Mention It’s Free?)
By simply checking your credit report every year, you can be more proactive and set yourself up for financial success. But even if you have bad credit, you don’t have to let your credit score get in the way of your future.
At Ride Time, we offer high-quality used cars to Canadian with bad credit – and no credit! We believe in second chances, so we work with a network of specialized lenders to give you great rates on high-quality vehicles. Browse our listings today!