Many people may put off checking their credit reports until they absolutely need to – perhaps because they’re applying for credit, or maybe they became aware of a problem with their credit. But there’s a lot to be said for proactively checking your credit – for one, you can discover errors, fraud or other problems, and take care of those issues before they prevent you from getting a loan when you need it.
Fortunately, under federal law, you’re entitled to a free copy of your credit report from each of the three major credit reporting agencies: Equifax, Experian and TransUnion.
So how often should you check your credit reports? At the very minimum, it’s smart to check your credit reports once a year. You can pull all three at once, or you can space them out throughout the year. You can make credit-report checking part of another annual event if you wish, like after New Year’s or your birthday. A new year means another look at your credit record.
You can request a free copy of your credit report by visiting AnnualCreditReport.com, and can view your credit report online or request a copy be mailed to you.
Once you have your credit report in front of you, review it and make sure all the information listed on it is accurate. Do you recognize all the accounts? Does it accurately reflect your payment history on each of the credit accounts listed? Did your credit file get mixed up with another consumer’s? Are there collection accounts that you don’t recognize?
Be sure to dispute any errors or inaccuracies that you find.
More Frequent Credit Checks
You may wish to pull a copy of your credit report more frequently than once a year, especially if you plan on applying for a major loan, such as a car loan or a mortgage. By double-checking that your credit report is error-free, you can help to ensure that the lender is using accurate credit information when determining what interest rate to offer you on a loan.
Also, if you are worried your credit has been compromised in some way by an identity thief or through a data breach at a retailer or financial company, you may wish to take some extra looks at your credit report throughout the year.
A paid credit monitoring service is one way to monitor your credit record throughout the year. You will receive your updated credit reports monthly or quarterly, depending on the service.
Free Credit Monitoring
Another way to monitor your credit is by using a free online service. You can create a free account with Credit.com, which will provide you with an easy-to-understand breakdown of the information in your Experian credit report, using letter grades to show you exactly how you are doing. It also provides two credit scores (a big drop in your credit score may mean it’s time to take a closer look at your credit report) and guidance on how to improve based on your particular credit standing. It’s updated every 14 days.
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