If you know that you have bad credit, you probably avoid looking at your credit score. Out of sight, out of mind, right? You probably think that what you don’t know can’t hurt you.
Well, that’s not exactly true when it comes to bad credit. Bad credit is always going to have an effect on you – regardless of whether or not you know your score. Banks, lenders, and financial institutions will always check your credit before doing business with you – and they’ll get the full picture of your finances, whether you want them to or not.
So it’s important that you understand your own credit – whether you’ve got an excellent, 800+ FICO score, or are struggling to hit 600 due to some unfortunate financial decisions. Knowing your credit score is the first step to rebuilding your credit – so here are the top 5 reasons that you need to know your credit score – even if you know that it’s bad.
1. You Can Get Better Rates On Loans
That’s right – even if you have bad credit! After all, not all bad credit is built alike – a score of less than 680 isn’t ideal, but many lenders are still willing to offer competitive APRs and lending rates to Canadians who have less-than-ideal credit scores.
And even if your credit score is lower – in the 500s “high risk” category – knowing your credit score can help you understand exactly what rates you should be looking for, whether you’re getting a personal loan to help refinance credit card debt, or trying to finance the purchase of a used car.
2. You Can Contest Charges On Your Credit Report
Though your credit report is generally accurate, most of what’s on it is reported by third-party companies – and they may not always be accurate when it comes to reporting incidents in your financial past.
For example, a credit card company may have marked you as a “charge-off” on your credit report after you didn’t pay your bills for six months – but then you managed to repay your debt in full!
Regardless, the charge-off could be affecting your credit score. If you look at your credit report, you can contest the charge-off with appropriate documentation, allowing you to eliminate some of its negative impact on your credit score.
3. You’ll Be Able To Understand How Credit Works
You can’t understand something that you don’t know – so checking your credit regularly and knowing your score helps you understand how your credit works. Even if you know you have bad credit, it’s worthwhile to take a deep look at everything that is negatively affecting your score – from simple late repayments to bankruptcies and charge-offs.
Knowing where you stand in the credit world is very useful, as it gives you a baseline understanding of your financial situation that you likely lacked before you began checking your credit scores. This leads us to our next point.
4. Rebuilding Your Credit Is Easier
You can’t build a house without a foundation, you can’t build a car without a chassis, and you can’t rebuild your credit without knowing how bad (or good!) it is! You have to understand your credit score before you can begin rebuilding it in earnest.
If you have a decent credit score, this may be as simple as repaying some old credit cards, increasing a loan payment, and making sure that you’re not missing any other scheduled repayments.
If you have a poor credit score, this process may be more difficult, and you may even have to declare bankruptcy or insolvency if your debt burden is extremely high. However, you still need a rebuilding point – and though the journey will be difficult, it’s always better to start sooner, rather than later.
5. Catch Fraud Early
Sometimes, a credit score is the only way to detect fraud such as identity theft. If a thief has applied for a loan, credit card, or other financial instrument with your information, your credit report is the ideal place to catch these issues and dispute them.
If you see fraudulent charges, you can get in touch with Transunion Canada or Equifax, and begin explaining the situation, as well as any financial institutions responsible for issuing fraudulent lines of credit – clearing up these issues can actually boost your credit rating!
Because of this, it’s important to check your credit report annually, at the very least – both Transunion and Equifax offer a governmentally-required yearly credit report, so you should take full advantage of this fact, and check your report every year.
Bad Credit? Need A Car? Come To Ride Time Now!
Ride Time is the best used car dealership in Winnipeg – and we offer shipping all around Canada, and the world! We can get you an incredible deal on a great car – no matter your credit score.
All we need are three things: proof of employment for 3 or more months, a take-home salary of $1500/month before deductions, and a valid driver’s licence. If you can provide us with these three things, we can guarantee you a great rate on a fantastic used car.
We don’t finance our cars ourselves, either – we have a specialized network of 15+ lenders that most other dealerships do not, and they specialize in providing reasonable loans to people who are looking to rebuild their credit – and get a great used car in the process.
So browse our online gallery of used cars, trucks, and SUVs today. And whether you have great credit, decent credit, or bad credit, trust Ride Time to be able to help you finance a terrific car at a great rate!