A good credit score is important when it comes to buying a car, a house, and even when applying for a new job or insurance policy.

However, more important than checking and knowing your actual score is consistently reviewing your detailed credit reports. Each of the three major credit bureaus (Experian, TransUnion and Equifax) allow you to check your credit report for free. 

Recently, a pandemic era policy allowing you to request your credit report from each bureau once per week was made permanent. This is a big change from the previous rules which only allowed you to pull your credit reports once per year.

Why check your credit reports?

These credit reports summarize your personal credit history – including how long you’ve had credit cards open, the amounts you currently owe on loans and credit cards, and your payment history.

Incorrect information that negatively impacts your credit score can make it harder for you to qualify for loans or for the lowest rates available.

When reviewing the reports, you want to make sure the information is complete and accurate. If there are issues, you should contact the credit bureau and the company who is reporting the incorrect information – which could be a credit card company or other lender. This FTC web page provides details on how to do this.

When to check your credit reports

I recommend reviewing your credit reports from each credit bureau at least once per year. Of course you can now do this much more frequently, which certainly can’t hurt, but once a year is typically sufficient. And there are a couple instances where checking your credit more regularly makes sense:

Before a major purchase – if you plan to buy a house or a car in the near term, check your credit now so that you don’t run into any surprises when you begin applying for loans.

If you suspect you’ve been the victim of identity theft – review your credit reports if you have suspicious credit card activity or have seen any other signs of possible identity theft.

You can request free credit reports by visiting this website: AnnualCreditReport.com.

Joe Calvetti is a CPA and the founder of Still River Financial Planning, a comprehensive, fee-only financial planning firm that specializes in working with young families and professionals. Click here to learn more about how we work with clients.

Are you interested in staying up to date on new articles and other news from us? Sign up for our newsletter or follow us on Facebook and Instagram.

Ready to learn more about how we can work together? Schedule an introductory call.

Disclaimer: The information provided above is for educational purposes only and should not be considered financial, legal, or tax advice. You should consult with a professional for advice specific to your situation.