How often should you check your credit?

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When was the last time you checked your credit? Was it six months ago? The last time you refinanced or purchased your home? Or even years ago, so far back you’re not even sure?

Well, just like getting your teeth cleaned at the dentist, getting your oil changed, and filing your taxes, you should be checking your credit report carefully at regular periods.

However, studies show that 42% of Americans don’t regularly check their credit!

But unless you’re applying for lots of new credit accounts, are trying to improve your score for a big purchase like a home loan, or see evidence of identity theft, do you really need to go through the trouble of looking up your FICO?

Yes, and we’ll tell you why here.

Why should you check your credit regularly?

Your credit may have errors:

Did you know that your credit report may have errors? A study by the Federal Trade Commission found that more than 1 in 5 credit reports (21%) contain glaring errors, and that number is probably higher these days.

Even worse, 5% of consumers suffer through errors so serious that they are continuously overcharged for credit card debts, auto loans, insurance policies and other payments.

Over time, these errors could cause a lot of damage – not only to your credit score, but to your finances and, by extension, to your life. In fact, these errors or a drop in credit score can cause you to be turned down for a better mortgage, zero-interest credit card, lower auto or student loan, preferred insurance rates, and, in some cases, even cost you that dream job.

But the good news is that 79% of consumers who disputed credit report errors were successful in removing them, especially with the help of a trusted and reputable credit repair firm like Blue Water Credit!

Hacks, breaches, and ID theft:

I’m sure you’ve read the news about the massive data breach at Experian, one of the big three credit reporting bureaus. It’s expected that up to 143 million Americans – or just about half of all adults in the U.S.- had their data or sensitive financial information stolen.

It’s quite possible that your information was stolen, too, and that very well could mean ID theft or financial fraud is coming your way.

Consider that:

  • Last year, there were an estimated 15.4 million victims of ID theft and fraud, costing the victims more than $16 billion!
  • A new study by Bankrate.com found that at least 41 million Americans have already been a victim of ID theft, about one in six adults. Additionally, 50% know someone who has had their ID stolen.
  • About 50% of all victims realize that their identity has been stolen within three months.
  • But about 15% don’t learn of their ID theft for four years or longer!
  • 64% of ID theft improprieties and fraud involve stolen credit card accounts.
  • 34% involve misuses of bank accounts and debit cards.

If a cybercriminal gets a hold of your data, passwords, or even basic information like name, address, birthdate, etc., it’s way too easy for them to sell your info on the dark web or open up new credit card accounts.

When that happens, you’ll expend a colossal amount of time, energy, and even money cleaning up the financial mess.

Are you convinced?

But all of this can be identified and taken care of very early, before the damage is done, just by checking your credit regularly.

Here is when you should check your credit:

In advance of a loan or big purchase

If you plan on refinancing, buying a home with a mortgage, taking out a new credit card, business loan, or apply for student loans, etc. you probably want to look at the state of your credit score at least a few months ahead of time. Not only will you know what rates and terms that should be available to you based on your score, making you a smarter consumer, but you’ll be able to identify and fix any problems ahead of time.

Annually

Just like paying your taxes, your annual doctor’s visit, or spring cleaning, it’s recommended that you give your credit report a thorough look once a year. There are several ways to do that, including paying to have it pulled or accessing it for free from the bureaus.

Every four months

Even better than just checking your report once a year, pull up your credit report every four months – for free. How can you do that? Each of the three major credit reporting agencies (Experian and TransUnion and Equifax), will give you your credit report for free once a year. If you stagger your requests for those reports every four months with a different bureau, you’ll have a full survey of your activity over time. But remember that these bureaus act independently, and so an issue still may not be discovered for many months if it doesn’t show up on that particular report.

You can get these credit reports at no charge from Annual Credit Report.com or by calling 1-877-322-8228.

Monthly

These days, wise consumers conduct at least a quick once-over of their credit every single month. The best way to do this is by looking at your credit card statement, which should provide an updated credit score. While these scores may not be consistent across all reports and bureaus, they will give you a good indicator of general trends and what’s going on with your credit.

For instance, if your score dropped 50 points from month-to-month on the same credit card statement, but you haven’t run up new debt or done anything drastic, that could be a sign of an error – or even that someone has access to your information and is opening accounts in your name.

Daily!

Isn’t it a little ridiculous to check your credit activity daily? Of course, we don’t expect you to take the time and money to access your credit every single day, but a good monitoring service will. These days with increasing ID theft (and especially in the wake of the Equifax hack), there are plenty of reputable monitoring services that will keep tabs on your credit, waving a red flag quickly if they see any suspicious activity.

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With these different periodic checks, you should feel confident that your credit is being watched sufficiently and you’re well protected! Contact Blue Water Credit if you have any questions or need help!

 

 

 

 

 

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