Jump-Start Your Credit: How to Monitor Your Credit for Free
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Your credit history can affect how much you pay for car or home insurance, your ability to rent a house or an apartment and even your chances of getting some jobs. That's why it pays to work on your credit and build it up.
Monitoring your credit can be a little like checking your blood pressure to see how your new exercise program and diet are affecting it. You’re unlikely to see steady, unbroken progress, but it can let you know if you’re on the right track.
What is credit monitoring?
Credit monitoring is simply checking your credit report and/or score for changes. It can help you connect how you’re handling credit with changes to your score. That’s especially useful when you’re building credit because seeing progress encourages you to keep going.
It can also help you quickly spot problems or signs of fraud. Credit monitoring may alert you to:
An application or new account in your name.
Payments reported as 30 or more days past their due date.
An account that has been closed.
New address or name changes to your credit file.
Public records in your name, such as bankruptcies, property liens and judgments.
How often should you check?
Credit expert John Ulzheimer recommends checking monthly. That’s how often your creditors report your account activity to credit-reporting agencies.
You can check more often if you like — checking your own credit will not affect your score. Many personal finance websites offer free scores and credit reports. NerdWallet updates your free credit score and report information weekly.
Through April, you can also get your credit reports weekly for free from the three major credit bureaus by using AnnualCreditReport.com, although it does not include a score.
There may be times when you want to check your credit frequently. Credit bureau TransUnion says those include when you plan to apply for new credit or you are searching for a new job. But there is no need to check daily — that can lead to needless anxiety.
How to get the most out of credit monitoring
Credit monitoring should make your life simpler. To that end, use it to confirm that your credit report is as you expect it to be.
Expect your credit scores to fluctuate — they are calculated on demand, so they’ll change a bit depending on the data that’s in your report at the time a score is requested. You are looking for overall trends or a big, unexplained change that could suggest identity theft or fraud. There is no need to explore tiny changes in your score to try to figure out what happened.
You may be able to control the number and types of alerts you get. Limit them to ones you really need. Too many emails and texts can lead you to delete them unread.
If you see information on your credit reports that you don’t understand or don’t recognize, investigate. If you see an error, dispute it with the credit bureau in question. Check the other two bureaus, too, to see if they have the same mistake needing correction.
What credit monitoring can’t do — and what you should
Credit monitoring won’t prevent someone from using your credit data — it just lets you know what has already happened. It’s still up to you to do the things that build and protect your credit, such as:
Paying bills on time and not using too much of your credit limits.
Disputing inaccuracies on your credit reports.
Avoiding identity theft ploys, like phishing emails, and keeping your credit information private.
Checking your credit card statements for signs of fraud.
The simplest way to avoid worrying about an application you did not make or new credit opened in your name is to seal off access to your credit information by freezing your credit. That way, if someone attempts to apply for credit using your information, the would-be creditor can’t access your credit reports, and the application likely won’t be approved.
Is it worth paying for a monitoring service?
Several companies offer paid credit monitoring, but before you commit to paying, compare the service to protection you may already have access to. You may have memberships or employee benefits that include identity theft coverage — and credit monitoring is generally included. If your personal data has been compromised in a data breach, you may be offered monitoring coverage at no cost to you.
If you decide to pay for monitoring, pick a service that covers all three major credit bureaus so you have a comprehensive view of your credit. But if high debt is holding your score down, that money might be better spent reducing that debt.