The simple answer is you can check your credit report as many times you want, and this won’t make a negative impact on your credit score. You can check your payment history, credit history, hard inquiries, and soft inquiries annually unless a specific reason calls for it. You can order a free copy of your credit report from Equifax, TransUnion, and Experian once a year. You can analyze the information used to calculate your credit score. If there is any mistake, you can take steps to rectify it.
How many times you should check your credit report
Just because you can check your credit report as many times as you want doesn’t imply you must always do it. You have to pay a fee between $1 and $11 for checking your credit report more than once. For example, you can check your credit report from Experian for $1. Why should you pay $1 when it isn’t needed?
Here is a quick guide to help you understand how many times you should check your credit report.
1. Check your credit report once a month when you want to build credit
Is your credit score bad? Have you filed bankruptcy in the past and wish to rebuild your credit? If so, then you should check your credit report once every month. You need to monitor your progress every month.
Some credit monitoring services give you unlimited access to credit information. So you can check your credit report regularly. But it is pointless to obsess over every point. Information gets updated and credit score changes frequently. Lenders don’t give too much importance to small differences. Thought it would make a difference if your credit score is close to the line on a credit score range. Suppose, your credit score is 596 and the minimum eligibility requirement for a home loan is 600. If a positive item is added to your credit report and leads to a 4 point increase, then you would qualify for the loan.
Aside from the plans to build credit, there are a few other reasons to check your credit report every month. If your personal data has been compromised recently, then it makes sense to keep close tabs on your credit. Same thing is applicable if you’re new in the job market or have divorced recently.
Those who check credit report every month are the ones who can see the first signs of identity-thefts quickly since they can spot the unauthorized charges easily. So if you can, review your credit report every month. Otherwise, you can check your credit report once in 4 months.
2. Check your credit report 6 months before buying a home or a car
Are you planning to buy a home or a car? This is a big financial commitment. In this case you should check your credit report 6 months before applying for an auto loan or home loan or a student loan. Negative listings on your credit report can affect your loan eligibility. An unpaid $16 library fine from 3 years ago can stop you from buying a new home.
It’s best to get a credit report 6 months before submitting a loan application and dispute the errors. You’ll get ample time to add missing information to your credit report and dispute the inaccurate information. Moreover, you can discuss about the negative listings that are there on your credit report and minimize their impact.
Tip: Review information from all the 3 credit bureaus in advance. Clear up any discrepancy on all your credit reports if you don’t know which credit report your lender uses. You should try to make your credit report look as good as possible.
Final advice
Healthy credit report and a good credit score can help you lead a good financial life. So you need to make sure the information on your credit report is absolutely correct. The 3 credit reporting agencies don’t share information with each other. So there can be variation in information contained in 3 reports, and it is better to review all of them.
Also read - How to wipe off old debts from your credit report
