How Frequently Should You Check Your Credit Reports?

Your credit report plays a crucial role in your financial health, influencing everything from loan approvals to the interest rates you’re offered. Regularly checking your credit report can help you spot errors, detect identity theft, and monitor your credit score to stay on top of your finances. But how often should you actually review it?

The General Rule: Check at Least Three Times a Year

At a minimum, it’s recommended to check your credit report at least three times a year—once every four months. Since you’re entitled to a free report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) annually, you can stagger your requests. By spacing them out, you’ll always have a current snapshot of your credit standing and be able to track changes over time.

When Major Life Events Occur

Certain milestones or changes in your financial life call for additional attention to your credit report. If you’re planning a big financial move, such as buying a home or refinancing a mortgage, it’s essential to check your credit reports several months in advance. This allows you to address any issues that might hurt your credit score before lenders take a look.

Major life events like getting married, divorced, or starting a new business may also impact your credit. It’s a good idea to review your reports more frequently during these transitions to catch any errors or unfamiliar accounts.

If You’re Repairing or Building Credit

If you’re actively working on improving your credit, such as after paying down debt or settling an account, you might want to check your report monthly. This helps you track your progress and ensure that positive changes are reflected accurately.

Similarly, if you’re building credit for the first time or after a significant setback, keeping an eye on your report monthly can give you peace of mind that everything is moving in the right direction.

Monitor for Identity Theft and Fraud

Unfortunately, identity theft and fraud are on the rise, and catching them early can make all the difference. Reviewing your credit report regularly allows you to spot unauthorized accounts or unfamiliar activities. In this case, a more frequent review—such as every few weeks or monthly—may be necessary.

What to Look for in Your Credit Report

When reviewing your credit report, it’s important to be thorough. Here are some key areas to focus on:

1. Personal Information
   Ensure your name, address, and Social Security number are correct. Any discrepancies could indicate identity theft or errors that need to be corrected.
2. Accounts and Balances
   Check that all accounts listed are yours and that the reported balances are accurate. Look for any unfamiliar accounts, which could be a sign of fraud, and confirm that closed accounts are noted as such.
3. Payment History
   Your payment history has a significant impact on your credit score. Make sure all payments are reported correctly, especially if you’ve always paid on time. Incorrectly marked late or missed payments could hurt your score.
4. Credit Inquiries
   Review the inquiries section to see who has requested your credit report. “Hard inquiries,” such as when applying for a loan or mortgage, can affect your credit score. If you notice inquiries you didn’t authorize, that’s a red flag for potential fraud.
5. Public Records
   If you’ve had a bankruptcy, lien, or other public record, make sure these are accurate and, if applicable, removed after the appropriate amount of time. Errors in this section can significantly harm your credit score.
6. Debt-to-Credit Ratio
   Check how much of your available credit you’re using. A high utilization rate can lower your score, so it’s helpful to keep track of how much debt you have relative to your total credit limits.

By regularly checking these sections, you’ll be able to catch mistakes early, stay on top of your financial health, and be better prepared when you need to apply for a loan or mortgage.

How to Access Your Free Credit Report

As mentioned, federal law allows you to get one free credit report from each of the three major bureaus annually. You can visit AnnualCreditReport.com to access these reports. Additionally, some credit card companies and financial apps now offer free credit score monitoring, giving you another way to stay informed.

Monitoring your credit report is key to maintaining your financial health. For most people, checking it three times a year is sufficient, but certain life events or credit goals may call for more frequent reviews. By staying vigilant and knowing what to look for, you’ll be better equipped to manage your credit, catch potential issues early, and make informed decisions about your financial future.

First Union Home Finance is here to help you navigate your credit and lending options. Reach out to us with any questions about how your credit impacts your mortgage journey.