Would you believe that over half of Americans don’t know their credit score and even more have never seen their credit report. This may not seem like a huge deal but these folks may be giving cash away without even being aware of it. Your credit score is a strong factor in regards to your personal finances. Not understanding your score can set you back, not only in regards to making important financial decisions, but in addition in your day to day finances. Here are the top three ways that can cost your money when you don’t monitor your credit score & credit history:

1. Interest/Premiums

interest ratesYour credit score determines your rate of interest on lines of credit such as a mortgage to a credit card. While not the sole factor that lenders and banks contemplate, it can be a significant one. Your credit rating also determines the amount you’ll pay in insurance premiums, whether life insurance or car insurance. Having a poor credit rating could result in you spending tens of thousands of dollars in additional interest to lenders over time, particularly if you possess an automobile,  a house or have credit card debt.

Understanding your credit rating is an excellent spot to begin, but really tracking your credit can allow you to locate the very best areas to improve your score so that you aren’t paying extra in premiums and interest. As soon as you have access to your own credit file, look on it for any errors, whether a late payment or your address that you really paid by the due date. It is your responsibility to discover those errors, although lenders could make errors when reporting to the credit reporting agencies. When you find the errors, report them to the credit reporting agencies, or you also could hire a credit fix service to get it done for you personally.

2. Fraud

Identity theft is increasing, big time. Together with the progress of technology, it is becoming simpler and simpler for hackers to gain access to your private information and open new credit cards, mortgages, auto loans and even bank accounts in your name. If identity thieves do happen to steal your sensitive information, credit monitoring will catch the unusual credit card charges and newly opened accounts.  You will be alerted to the fraud promptly.  Without credit monitoring, you could go months before the fraud is detected. 

Tracking your credit history is the easiest way to check for identity theft. You are going to see if new accounts are being started without your knowledge. Many including tracking your social security number, credit report monitoring services additionally provide an extensive range of identity theft protection services, you address, other areas that identity thieves may use your identity as well as the black market.

3. Collection Accounts

Among the most frequent ways your credit rating can be dragged down is by old accounts being sent to collections. Say you change cell phone providers and you also incorrectly forgot to pay the last $21.95 that you owed on your account. You figured you were done with the account, which means you probably threw away bills that were sent to you. Should you not pay that $21.95 within a specific amount of time, the phone carrier can send your account to collections and you might not even know. 

It is possible to handle these collection errors before they cause an excessive amount of damage to your credit score if you’re tracking your credit history carefully. Credit monitoring will detect these items and alert you so you can investigate the cause.