Are You Checking Your Credit Score Too Often?

Reading about credit scores often can make you paranoid. You probably already know that credit scores are important for many of your financial moves – even those that don’t involve borrowing. Because your score is changing all the time, you might feel the need to check it all the time. However, keeping up with your credit score, especially your FICO score can get expensive and time-consuming. Instead of checking your credit score all the time, just check it at a few key moments.

Six to twelve months before you apply for a mortgage or car loan. When you’re getting ready for a major loan, you want to have your credit score in the best shape possible. Not only does this impact your chances at getting approved for the loan, it also influences your interest rate.

Checking your credit score ahead of time gives you the opportunity to repair your credit if necessary. Raising your credit score just a few dozen points can make a significant difference in your interest rate and your monthly loan payment. You could ultimately save thousands of dollars over the life of the loan by working to boost your credit score ahead of a major loan application.

Every month or so if you’re repairing your credit. If you’re actively repairing your credit – paying off accounts or working to have negative items removed from your credit report – you’ll want to check your credit score periodically to confirm your efforts are making an impact. Checking your credit score is the best way to see the results of your credit repair. Some credit monitoring services can alert you to changes in your credit score.

Once or twice a year to monitor your credit and know where you stand. Your credit score can give you an indication of whether there’s been fraud on your credit report. For example, if your credit score has fallen drastically since the last time you checked, it’s a signal to check your credit report to make sure there aren’t any fraudulent accounts or significant errors.

Besides checking for identity theft, it’s a good idea to check your credit score periodically simply to know where your credit stands. You never know when you’ll need to know this.

Checking Your Score Doesn’t Hurt

The good news is that checking your own credit score won’t hurt, even if you check it everyday. Just make sure you’re checking through a service specifically designed for checking your credit score. Don’t have a creditor or lender pull your credit score for you. This would register as a hard inquiry on your credit report and could damage your credit score, especially if you do it often.

Remember that you have several different scores from the major credit bureaus and from FICO. These credit scores can differ from each other so if you check your credit score regularly, stick to the same provider. That way you’re comparing apples to apples, so to speak.

As you monitor your credit score, don’t forget about the free credit score options: CreditKarma.com, CreditSesame.com, and Quizzle.com. While these aren’t the scores that lenders use, they’re perfect for educating yourself on your credit standing. You can purchase your credit score from myFICO.com for a score that’s closer (but still not an exact match) to what a lender might see when they check your credit score.