Most people who are trying to build, rebuild or repair their credit know that monitoring your credit reports is the best way to stay on top of your current status. Checking your report can not only keep you appraised of where you stand as far as your debts and score go, it can allow you to spot and remove costly mistakes. But how often should I check my credit report? Let’s take a look at an overview of how your credit report works.
The Three Bureaus
In the United States, there are three major credit bureaus whose reports are used to monitor credit. These bureaus are Experian, TransUnion and Equifax. The reports from each of these bureaus can be very different from one another, and no lender is required to check all three or any given one, nor report to any or all. This means that monitoring all three is important to keeping your credit top notch.
Each credit bureau is required by law to provide you with a free report once every year. It is your choice whether to look at one or all of these, but checking them all is often a good idea.
Watching Your Credit
Monitoring your credit very closely is vital to keeping a strong credit score. Not only will it permit you to take control of your own legitimate credit issues, it can be an important way to spot fraud. Identity theft is all too common these days and strange charges on your credit report can indicate lines of credit that you never opened. This can be a strong tool in stopping criminal activity.
One at a Time or All at Once
Since all three reports are available to you for free once per year, checking them on a rotating basis will allow you to monitor your credit approximately every four months. However, if you are trying to improve your score, or are finding you have a tough time getting credit, you may want to look at all three at once. Doing this allows you to look for errors on one or more, and compare the results of each.
Effects on Credit
Requesting multiple copies of your credit score for review, or checking them more than once per year, will not negatively affect your credit score. Making multiple credit applications at the same time or within close proximity of each other may create a red flag when creditors do what is known as a “hard” pull of your reports. This can negatively affect your overall score. When you request reports, however, this “soft” pull does not have any effect on your overall score. It will, however, incur a small fee for each report you request before twelve months have passed.
Put simply, how often you should check your report is really up to you. If you are monitoring your scores very closely, several times a year can be helpful. For many people, rotating your reports every four months is plenty.
If you are looking to purchase a car to help get your credit flowing, we can help. Take a look at our featured dealerships, and get in touch for a one-on-one consultation today!