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7 Signs That Prove Your Credit Prowess

It’s a known fact that credit scores play an important role in maintaining your financial health. A good credit score unlocks several benefits, including access to loans and credit cards at most favourable terms.

If your credit score is as high as it can possibly be, you could be doing everything right with your finances. And that makes you a credit score pro. You may not know it yet, but these 7 signs are proof of you being a credit expert.

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You are a credit score pro if you show these 7 signs:

Sign 1: You pull your credit report to scan for errors regularly.

Most people have the habit of checking their credit scores frequently, but not many review their credit report to scan for errors. If you go the extra mile to do this, it means that you already know the impact of inaccurate information or wrong entry on your credit score, and this realization makes you a credit pro.

Sign 2: You apply for a loan or a credit card only after checking your credit score.

Lenders rely on your credit score to assess your creditworthiness while considering your credit card or loan application. So, if you are of the kind who checks the credit score before applying for any kind of credit, you are certainly a pro.

Sign 3: You have a credit score of 750+.

If you’ve been consistently hitting a score of 750+, it shows you have been borrowing and repaying responsibly. It takes a credit expert to pull that off, so kudos to you!

Sign 4: You know how to differentiate between hard and soft credit inquiries.

If you can clearly differentiate between hard and soft credit inquiries, you know what you shouldn’t do to harm your credit score. When you apply for a loan, the potential lender pulls up your credit report to evaluate your creditworthiness. This entry is registered as a hard inquiry. Hard inquiries reflect in your credit history and have the potential to affect the credit score.

Soft inquiries occur when you pull up your credit report or when a lender evaluates your credit profile to make a pre-approved offer. Soft inquiries do not register on your credit report and do not have an impact on your credit score.

Sign 5: You are credit savvy and not credit hungry.

Credit savvy people are the ones who monitor their credit score, read the credit report carefully, scan the report for errors, have a good mix of secured and unsecured loans, etc.

Credit hungry people make rookie mistakes of applying for too many loans, too frequently. These applications get registered as hard inquiries and negatively impact the credit score. In an attempt to get credit, these people come off as desperate in the eyes of the lender. A credit pro would never do that. They know the importance of spacing out their loan applications all too well.

If you know the difference between being credit hungry vs credit savvy, then go give yourself a pat on the back. You surely are a credit pro.

Sign 6: You know what type of financial transactions that can harm your credit score.

There are certain financial transactions that can lower your credit score. Some of them are large purchases, late payments, too many loans, credit card cash withdrawals, too much outstanding debt, etc. If you are aware of what type of financial transactions you should avoid, then you have the credit prowess you need.

Sign 7: You understand the concept of credit mix very well.

Credit mix is one of several factors that affect your credit score and it reflects your ability to juggle different types of credit accounts, such as student loans, credit cards, personal loan, home loan, etc. If you are maintaining a good mix of credit accounts, you certainly know its impact on your credit score. So, kudos to you. You are a pro at this.

Shiv Nanda

Shiv Nanda

Shiv Nanda is a financial analyst at MoneyTap who loves to write on various financial topics online. He also advises people on financial planning, investment choices and budgeting skills, and helps them make their financial lives better.

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