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How Often Should You Check Your Credit Score?

    

SUMMARY: Are you wondering how often you need to check your credit score with the major credit bureaus? The answer: It depends on your goals. We have the scoop for you.

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There are good reasons to regularly check your credit score, and many people do just that. But what is the right amount to check it? Can you actually check your credit score too often?

What is a Credit Score?

A credit score is a three-digit number lenders use to determine whether or not a borrower is a good candidate for credit. The number ranges between 300 to 850, and the higher the credit score, the better, meaning borrowers will get approved for more loan products at lower interest rates than borrowers with low credit scores.

What are Credit Scores Based On?

Credit scores are a reflection of your credit history, which is made up of the total number of open credit-based accounts you have (e.g. credit cards, auto loans, personal loans, etc.), your overall level of debt, and your payment history which shows how well or poorly you have repaid past debts, your credit utilization, etc. The credit scoring system used by most banks and other financial institutions is called a FICO score. It was developed by Fair Isaac Corporation in 1956.

Why Should I Check My Credit Score?

There are a number of good reasons to regularly engage in credit monitoring. Some of the more common reasons include:

  • To understand your current credit rating and position
  • To see if you have been a victim of identity theft
  • To ensure your credit report is accurate
  • To check on your credit-building progress

The Right Amount to Check Your Credit Score

Whether you are building new credit from the ground up, repairing bad credit, or just hoping to improve the good credit you have already established, most lenders and credit scoring agencies recommend you check your credit score at least once a year. Doing so will help you maintain your credit health by identifying any fraud or incorrect reporting before you apply for credit. Make sure to check your report from all three credit reporting agencies: Experian, Equifax, and TransUnion.

If you have challenged something on your credit report or otherwise requested a change, checking more often can help you discover whether or not your efforts have been successful.

It is important to know that personal credit checks are considered a soft inquiry as opposed to a hard inquiry and will not affect your credit score or have any negative effect on future lending decisions

How to Check Your Credit Score

Individuals can check their own credit with next to no hassle. Get a free copy of your credit report at annualcreditreport.com. Consumers are entitled to one free credit report from each of the major credit bureaus once a year.


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