American ExpressAmerican ExpressAmerican ExpressAmerican ExpressAmerican Express
United StatesChange Country

How Often Should You Check Your Credit Report & Score?

Experts suggest you check your credit score and report at least once a year – and sometimes more often – to spot errors or fraud and to get a sense of your credit health.

By Allan Halcrow | American Express Credit Intel Freelance Contributor

7 Min Read | January 29, 2021 in Credit

 

At-A-Glance

Start with an annual credit report “checkup,” plus additional checks anytime you plan to make a major financial commitment or decision, or if you want to monitor for fraud and identity theft.

To get a complete picture of your creditworthiness, review reports from all three of the major credit reporting agencies.

Credit reports are readily available for free. They’re also included in many fee-based credit programs.

Should you check your credit report often? The short answer is, “Yes!” But what does “often” mean in this context? Although there is no definitive schedule, a worthy comparison is to consider how often you should visit your doctor. Most of us will make an appointment for our annual physical, but we also go when we have symptoms that concern us or when we want to be sure we’re healthy enough to handle major life events, like having a child or moving to another state. Staying healthy is a powerful motivator. 

 

Staying financially healthy should be, too. Credit reports are the most effective tool we have to monitor our creditworthiness, and they also are a key indicator of our overall financial health. The information they contain can help us make wiser decisions that will save money and build a stronger financial foundation. Therefore, experts suggest you review your credit report in three general scenarios:

  • At least annually for a general credit “checkup.”
  • When a situation concerns you, such as signs of credit card fraud or identity theft.
  • Before you make a major financial decision, like applying for a mortgage or auto loan.

Let’s explore how often to check your credit report and how to do it.

 

Review All Your Credit Reports At Least Once a Year to Maintain Credit Health

There are three major credit reporting agencies in the U.S. – Equifax, Experian, and TransUnion – and each produces proprietary reports. These agencies simply report the data provided to them by creditors. And because creditors decide which data to share and when, it’s very likely that the three reports will be different. In other words, looking at only one or two of your credit reports may not give you a full picture of your credit situation.1

 

Because the information in your report may determine whether you are approved for a credit card or loan – and possibly whether you can rent an apartment or even get a job – it’s vital that it be accurate. And ultimately, you alone are responsible for ensuring that accuracy. When reviewing each of your three credit reports, pay careful attention to:

  • The accounts. You should recognize every debt, sometimes called a trade line, in the report. Something unfamiliar may be a simple error, or it may indicate that someone is opening accounts in your name.
  • The balances. It’s a good idea to know what you owe each of your creditors. If a reported balance seems high, your creditor may be reporting the wrong figure – or someone may be fraudulently using your credit card.
  • Payment history. Given that your payment history shapes 35% of your credit score, it’s important to keep an eye out for incorrect late payment reports.
  • Inquiries. If you haven’t applied for loans or credit cards but see recent hard inquiries on your report, someone may be trying to get credit in your name. 

The sooner you catch any of these errors or problems the better, so you may choose to review your reports more often than annually – and don’t worry, the idea that checking your credit report hurts your credit score is a credit myth. Experts suggest disputing any errors so they can be corrected, which can be done quickly on each bureau’s website. If you see signs of identity theft, alert the credit reporting agencies as soon as possible.

 

Reviewing Your Credit in These Key Situations Can Help You Stay Financially Sound

Besides regular checkups, these additional circumstances warrant reviewing your credit:

  • You want to apply for a mortgage. Reviewing your credit report three to six months before you plan to apply for a mortgage can give you time to correct any potential problems that might make it hard to get approved. Experts recommend employing the same strategy if you’re looking to buy a car or take out a personal loan.
  • Your identity has been stolen. Regularly reviewing your credit report is one way to help protect yourself from identity theft, but you might detect suspicious activity in other ways. If there are transactions on your credit card you don’t recognize, for example, or if your bank or creditor tells you that personal information may have been compromised, review your credit report more often to verify or rule out identity theft.
  • You’re recently divorced. Experts advise reviewing your credit report every few months to check that any formerly held joint accounts are reported accurately.
  • You’re seeking to change jobs. Many employers will review your credit report as part of a background check. They need your permission to do so, but you don’t want to lose out on the job because of an unexpected credit report error.
  • You have an agreement with a creditor. If you’ve negotiated a repayment agreement with a creditor, such as skipping or reducing a payment due to a hardship, you can review your report to make sure the creditor is honoring its commitment. 

Other circumstances that might warrant a credit report check include applying for insurance coverage, opening a new utility account, requesting a new cell phone plan, or pursuing certain investment activities like buying on margin – which is itself a form of credit.

 

Getting Your Credit Report Is Free – Up to a Point

If you now see the value of checking your credit report often, the next logical question is, “How?” Start by requesting all three reports at the same time when you review your credit for the first time or are looking to apply for a mortgage. Otherwise, getting a different one of the three reports every four months may be the most cost-effective way to keep tabs on your credit profile. Here are three guidelines on how to do it. 

 

1. Obtain free annual credit reports: Federal law requires each of the major reporting bureaus to provide a free copy of your credit report once a year. All you have to do is request your reports through www.annualcreditreport.com.2 But take note: Until April 2021, each credit bureau is also offering free weekly reports. Otherwise, you’ll typically be charged for any additional reports you request within a given year – but legally no more than $12.50 per report.3

 

In addition, credit reports are always freely available for people who meet certain criteria, such as:

  • You received a letter denying your credit or insurance coverage.
  • You are the victim of identity theft or fraud.
  • You’re an active-duty member of the armed services.
  • You’re unemployed and planning to apply for work within 60 days.
  • You receive public assistance.
  • You live in a state that provides free credit reports, including Colorado, Georgia, Massachusetts, and New Jersey. 

2. Use paid services: You can also get copies of your credit report through a variety of paid credit services that also typically offer other options – like credit monitoring or identity theft protection – in various packages. Just keep in mind that they generally don’t offer you all three credit reports, so you’ll want to request additional reports to get a full picture of your credit. 

 

3. Check specialized reports for free: Some parties – including apartment landlords, employers, insurance companies, subprime lenders, utilities, and banks – may request specialized credit reports. You’re entitled to free copies of those reports, too. The Consumer Financial Protection Bureau (CFPB) keeps a list of those reports.4 Experts suggest you review them only when they’re relevant

 

How Often Should You Check Your Credit Score?

Since your credit score is a snapshot of your credit health at a particular moment in time, you can check it as often as you’d like. Many financial institutions and credit education websites and apps offer educational credit scores. Your score is typically included on your statement or in the institution’s app, for free. Although this score is not necessarily the same score that lenders see, it can help you get a quick idea of where your credit stands. For more, read “How Often Does a Credit Score Update?

 

The Takeaway

Credit reports are readily available – often for free – from all three major credit reporting bureaus, so there’s no reason not to review them at least once a year. Doing so can help you catch errors you can correct or identify signs of fraud. Diligent monitoring can help ensure your report, and score, is accurate – and spare you unpleasant surprises when you apply for a credit card, loan, or make any other important financial decision.

Allan Harcrow

Allan Halcrow is a freelance writer concentrating in business, human resources, and diversity and inclusion. He is also the author of four books on management.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

The material made available for you on this website, Credit Intel, is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.