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You know staying on top of your credit is important, but how often should you check your credit reports?
The suffice depends on your situation, but the Consumer Financial Protection Bureau recommends checking your credit reports at least once a year, equally well as under specific circumstances, including …
- Before you take out a loan for a major purchase, such as a car or home
- Before you apply for a new job, as many employers check your credit
- To reduce your risk of identity theft
Freddie Huynh, vice president of credit gamble with Freedom Financial Asset Management and former senior data scientist at FICO, advises getting and reviewing your credit reports annually .
“ If you ’ re about to make a big purchase that requires a loanword, it may be helpful to check reports a few months before so there are no surprises, ” he says .
Surprises, such as mistakes on your credit reports showing a late payment that didn ’ t happen, could result in your recognition scores being lower than they otherwise would be. Checking your reports helps you identify incorrect information, which you can then dispute with the credit chest of drawers. If the error is on your TransUnion® citation report card, you can use the Credit Karma Direct Dispute™ feature to help rid your report of the error .
How to check your credit reports
Checking your credit reports can be slowly and complimentary. You can obtain one credit rating report card each year from each of the three major consumer credit report chest of drawers — Equifax, Experian and TransUnion — by visiting AnnualCreditReport.com. You ’ ll need to input your basic data, answer some identify questions and select the reports you want .
You can besides use Credit Karma to check your credit reports and monitor your VantageScore® 3.0 credit scores from TransUnion and Equifax for exempt year-round — there ’ s no terminus ad quem on the phone number of times you can check and it ’ s a easy question, so it won ’ triiodothyronine negatively impact your credit scores.
Credit reports vs. credit scores
There ’ s a deviation between checking your credit reports and checking your recognition scores .
- Your credit reports give you details about your credit activity, including open and closed accounts and your payment history.
- Your credit scores are three-digit numbers calculated based on information in your credit reports. Credit scores are designed to give lenders an idea of how risky you may be as a borrower. To many lenders, higher scores indicate that you’re a less risky borrower.
Your credit scores are an important indicator of whether you ’ ve been responsible with credit, and monitoring your scores is a estimable means to spot larceny or potential mistakes in your accredit reports. If your credit scores drop by chance, something might be wrong. You can check your credit reports to help determine what that might be .
Does checking your credit reports hurt your credit?
The good news program is that checking your credit reports yourself doesn’t hurt your credit scores .
When a lender has checked your scores ( after you ’ ve applied for a newfangled credit card, for example ), your scores may have dropped a few points. Because of this, you may be concerned that checking your own citation reports might lower your scores, excessively. But you don ’ t need to worry .
When you check your scores or reports yourself, it ’ s a soft question. When lenders check your credit to decide whether to give you a lend or a credit circuit board, it ’ randomness generally a difficult inquiry .
“ Soft inquiries don ’ metric ton negatively affect your credit score [ s ] at all. These are chiefly used for reasons other than underwriting for a loan, ” says Frank Acocella, an lawyer and founder of CounselPro Lending .
unvoiced inquiries, on the other hand, can happen when a electric potential lender checks your credit, which they typically do to assess your creditworthiness. Unlike piano inquiries, hard inquiries could have a negative impact on your credit scores.
Because hard inquiries could mean you ’ re taking on new fiscal obligations, multiple difficult inquiries within a short period of time have the electric potential to lower your scores. This is because certain credit-scoring models may determine that opening multiple credit accounts in a short period of time represents a greater credit risk .
Checking your citation reports at least once a year is recommended to monitor for errors and help reduce your hazard of identity larceny. however, keeping more-regular tabs on your credit is smart. When you spot problems early on, you can take seasonably action toward correcting any issues .
About the author: Christy Rakoczy Bieber is a full-time personal finance and legal writer. She is a graduate of UCLA School of Law and the University of Rochester. Christy was previously a college teacher with experience writing textbo… Christy Rakoczy Bieber is a full-time personal finance and legal writer. She is a graduate of UCLA School of Law and the University of Rochester. Christy was previously a college teacher with experience writing textbo… Read more.