How Often Should You Check Your Credit Score?
Credit scores can be one of the great mysteries of our financial lives. But they shouldn’t be. After all, one’s credit score is key to so many important things, such as purchasing a home or car and renting an apartment. One of the burning questions consumers have is: How often should I check my credit score?
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Before we even get to that question, let’s tackle another that often comes up: Does checking your credit score hurt it? Good news: It does not.
“Checking your own score is called a ‘soft pull’ and will not harm it in any way,” said Abby Fox, a certified financial educator running The Finance Fox. “When lenders check your score it is called a ‘hard pull’ which they can only do with your consent. Too many hard pulls in a short time frame can decrease your [credit] score.”
Since checking your credit score does not harm it, you can conceivably check it as often as you want. But how often and/or in what situations do finance experts recommend you check it? Let’s explore.
Regular Monitoring Is a Good Thing
Not only is regularly checking your credit score not a bad thing, it’s a good thing — as is getting a copy of your credit report, which is available to you for free from all three credit bureaus on a yearly basis.
“Regularly monitoring your credit report shows lenders and creditors that you’re keeping an eye on your financial activity and taking measures to ensure that all the information being reported is accurate,” said Donny Gamble, CEO of Retirement Investments. “This can be beneficial in establishing a good track record of creditworthiness. The only way that checking your credit report too frequently can hurt your score is if you apply for multiple loans or lines of credit within a short time period, as this could indicate to lenders that you are desperate for money or overextending yourself financially. In any case, simply reviewing what’s already on file won’t cause any harm — so take advantage of doing it often.”
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Check Your Score at Least Yearly for Errors and Fraud
You should get in the habit of checking your credit score regularly (at least once a year, but more often if you like) to ensure that there are no errors or fraudulent activity on your account.
“Your credit score is based on the information in your credit report, and if there are any errors or fraudulent activities on your account, they can negatively impact your score,” said Levon Galstyan, a certified public accountant with Oak View Law Group. “Therefore, it’s recommended that you review your credit report at least once a year to ensure that everything is accurate.
If you find any errors on your credit report, be sure to dispute them immediately with the credit bureau(s).
“The credit bureau(s) will investigate the dispute and make any necessary corrections to your credit report,” Galstyan said. “This can improve your credit score and prevent any negative impacts on your creditworthiness.”
Applying for Credit Cards or Loans
When applying for a loan or credit card, it’s important to know your credit score, so you’ll want to check it before doing so.
“Lenders will use your credit score to determine your creditworthiness, so it’s important to know your score before applying for credit to see if you would even qualify,” said Rachel Ehrlich, COO of Klutch Credit Card.
Renting a Home
Landlords and property management companies typically check your credit score before renting out housing. Know yours before you apply.
“A good credit score can help you secure a rental unit, while a low score can make it more difficult to find housing,” Galstyan said.
Buying a Car
A car is a big purchase that usually requires a loan. And for this, you will need to know your credit score.
Applying for a Job
Some employers may check your credit score as part of the hiring process.
“This is more common in industries where employees handle money or have access to sensitive financial information,” Galstyan said. “A low credit score could potentially impact your ability to get hired.”
Catching Identity Theft
A suddenly lower credit score (or other suspicious activity) could be a telltale sign of identity theft. You want to catch it right away.
“If you suspect that you are a victim of identity theft, it’s important to check your credit report for any unauthorized activity,” Galstyan said. “Identity theft can lead to fraudulent accounts being opened in your name, which can negatively impact your credit score.”
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