Your credit score an indication of the health of your finances. Banks and credit agencies also keep a check on your credit score to ascertain whether you are judiciously paying your dues. Therefore, it is important for you to keep a track of your credit, especially when you want to apply for loans and mortgages. Your loan or mortgage application will get approvals only when you have a good credit score.

Follow these four simple steps to keep a watch on your credit.

Restrict your credit card balance from growing
If you pay your bills on time and do not carry a huge balance on your credit card, you can easily ensure that your credit score is healthy. Even if you are unable to pay the credit card dues in full, make it a point to repay the minimum number of payments in time and keep your balance lower than your credit limit. These are the two main factors that determine your credit. Building a strong credit is about being financially disciplined, and if you have these factors taken care of, you are halfway to having a good credit score.

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Collect your credit report and review it
There are three major credit bureaus where your credit score is reported. You can request a free copy of your report and take a good look at it. It will help you identify whether there are any mistakes in the report. Sometimes mistakes in the report bring down your credit score. Get the report and see for yourself where you stand. In case of any discrepancy in the report, you need to contact the bureau.

Review the credit card transactions and bank statements
If fraudsters gain access to your credit card information, they will bring down your credit score by using your card for unscrupulous purposes. It is better to collect your monthly bank statement and credit card transactions and review them. If you notice any transaction you cannot identify, you need to figure out how it ended up there. Contact the bank or the credit card company and ask for details.

Check the credit score while using it
Whenever you are applying for a loan or for a credit card, your credit score will play a significant role. This is the right time to ask for your credit score, and the lending institution or the bank will share the information with you once they are done reviewing your loan application.

Knowing your credit score is essential before applying for a loan. If you notice that the score is lower than expected, you can work on rebuilding the same. All you need to do is control your spending and pay off the debt on your credit card quickly. Make it a point to sit down every month and go through the reports that reflect your credit score. Contact banks or agencies if it is required, but do not skip a single month. If you can keep an eye on your credit, you will be aware of where you stand well and will be able to take the right steps towards building a higher score.

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