You’ve probably heard repeatedly that you should be keeping an eye on your credit. After all, the various versions of your credit scores help lenders determine, among other things, the rates they’ll offer you on an auto loan, credit card, mortgage, cell phone plan or insurance policy. Your credit reports can even factor into a company’s application process.
But when exactly should you check your credit profile?
Lots of Good Times
There’s really no single best time to pull your credit reports or credit scores — there are many times, however, where doing so is absolutely called for. For instance, it’s in your best interest to check your own credit right before you apply for something that requires someone else to take a look at your standing.
In this case, you’ll want to be sure your credit report is accurate and your scores are in good shape when you’re about to shop around for financing — otherwise, you risk paying a higher interest rate or, worse, getting hit with a surprise loan denial. It’s also a good idea to check your credit before you apply for a new service contract, a job or to rent an apartment — all times when a person or company you’re looking to work with will likely assess your creditworthiness.
If you ever have reason to believe your identity has been stolen or compromised — say, you receive a data breach notification, your credit card gets declined or a debt collector calls about accounts you’ve never heard of —you generally want to check your credit reports for fraud. (You can go here to learn what to do if you fall victim to identity theft.)
A Thorough Credit Check
Beyond a loan search, red flag or major life event, it’s a good idea to regularly monitor your credit. You’ll want to be sure you understand what’s driving your scores and if there’s anything you can do to improve them. You’ll also want to identify any inaccuracies as soon as possible — error disputes can take some time to resolve (the bureaus have 30 days to conduct an investigation) as can incidents of fraud. The idea is to keep identity theft from snowballing.
Federal law entitles you to a free credit report for each credit bureau every 12 months via AnnualCreditReport.com, so it’s fairly easy to do a thorough check on your credit reports at least once a year. You could also request a report every four months from one of the major credit reporting agencies — Equifax, Experian and TransUnion — to view your reports more often. (First-time credit checkers may want to pull all three together before adopting staggered schedule, because all lenders don’t report to each bureau and there could be variations among them.)
Checking on Scores
Keep in mind, too, there are many ways to get free credit scores these days. You can view two of your scores, updated each month, on Credit.com, and some credit card issuers include scores on their billing statements. You can easily see where you stand every 30 days or so.
Monthly credit monitoring is particularly important if your score is in rough shape so you can track your progress as you take steps to fix your credit. Just be sure to compare the same credit score each time (there are hundreds of different models) and not stress over small fluctuations. Instead, focus on building good credit over the long-term by making all loan payments on time, keeping debt levels low, limiting inquiries and only adding a mix of credit accounts as your scores and your wallet can handle them.
[Offer: Your credit score may be low due to credit errors. If that’s the case, you can tackle your credit reports to improve your credit score with help from Lexington Law. Learn more about them here or call them at (844) 346-3296 for a free consultation.]
More on Credit Reports & Credit Scores:
- The Credit.com Credit Reports Learning Center
- What’s a Good Credit Score?
- How to Get Your Free Annual Credit Report