Who Should Check Their Credit Score?

When it comes to checking credit scores, there are differing viewpoints amongst the people of South Africa. Certain people in the country state that every individual, regardless of the current state of his finances and future needs of funds, should check his credit score at least twice every year.

The logic behind this belief is that it is possible for the credit score to carry mistakes that can result in a major meltdown in your financial prospects. Such mistakes can occur either due to human error or because of mistakes from some borrowing institution that failed to put in updates.

Alternatively, there are other people that think that a person who has kept his finances in order does not need to check it regularly because credit scores are fairly reliable.

While whichever of these groups this falls in may be a matter of beliefs and preferences, one thing that is certain is that people who plan to do the following cannot ignore their credit scores:

1. Getting a new car or a motorcycle:

Buying a new car or a motorcycle is an expensive proposition which most people cannot afford outright. This is why people get car loans or motorcycle loans.

If a person is planning to get a new car or a motorcycle and needs to finance the endeavour then the lending institution would check his credit score. Therefore, a person who wants to be approved for a vehicle loan needs to check and make sure that his credit score is in order.

2. Insure some item:

Insurance companies are known to be extremely particular about evaluating the risk profile of their potential customers. This risk profile is based on a wide variety of things and one of these is the credit score of the applicant.

Thus, a person looking to insure a car, a home, a business or any other possession needs to pay attention to his credit score. Checking the credit score would allow such a person to evaluate his own chances of being approved for the insurance policy.

3. Applying for a credit card:

Credit cards are a major part of people’s lifestyles in the modern world. However, credit cards are only forwarded to people who the credit card company deems as capable of paying back the owed amount. In effect, it is important for a person planning to apply for a credit card to check up on his credit score.