How Frequently Should You Check Your Credit?

There are three credit bureaus that monitor your credit score: Equifax, Experian, and TransUnion. Federal law requires each one of these bureaus to offer you a free credit report every 12 months, upon request. For some people, this annual review of their credit is sufficient. For others, however, it is smarter to check your credit score on a more frequent basis with an active credit monitoring and identity theft alerts service.

When Can You Check Your Credit Score for Free?

In addition to the one free report you are entitled to every year, there are two other situations when you are permitted to gain access to your credit report – regardless of whether or not you have already checked it once within the last 12 months.

When You Are Denied a Credit Application

Any time that you are denied a credit application – for a mortgage, loan, credit card, etc. – you can request a copy of your credit report from the financial institution that turned you down. The request must be made within 60 days, but asking for the report is well worth your time. Unless you already understand that your credit score is poor, requesting this extra report can permit you to discover why you were turned down. As one survey discovered, the reason for your denied application may be because of an error in your credit reports. Correcting this error may permit you to take out the loan.

When You Are a Victim of Identity Theft

If you are ever concerned that your identity has been stolen, you can contact one of the three credit bureaus and inform them of your situation. They will contact the other two bureaus and your credit reports will be made free so that you are able to monitor your activity until the situation is resolved. By placing an alert on your credit score the moment you are concerned of a theft, you will protect your score from being further damaged.

When Is It Right to Regularly Monitor Your Credit Score?

Discovering a mistake in your credit report may save you thousands of dollars in rates and fees. Furthermore, an uncaught act of identity theft can leave your credit score damaged for years.

Fortunately, there are multiple services (including SmartCredit.com) that allow you to regularly monitor and track your credit score – notifying you of any significant changes that may occur. Although these services are not for everyone, they can provide a tremendous amount of benefit to those who need to ensure the integrity of their credit score.

If You Need to Borrow in the Future

If you are planning on making any large purchases that require a loan, it is essential to keep your credit score as high as possible. Even that forgotten $10 late fee from the library can harm your score. As a few point difference can save you thousands of dollars, regularly monitoring your credit score is a wise decision for someone considering a future purchase.

If You Share Credit With Someone Else

Even if you do not need to maintain a high credit score, if you have a shared credit card, mortgage, or bank account with someone else, your activity can negatively affect their score – making it more difficult for them to borrow in the future. Therefore, unless you plan on closing down all joint accounts, it is wise for you to monitor your own credit score for the sake of your friend or family member.

In short, make sure that you take advantage of your free annual credit report. Furthermore, make sure to check your score at least six months before a big purchase to give you time to refute any false information. Finally, if maintaining a tip-top credit score is important to you, consider signing up for a service that can help you monitor and protect your credit rating.