Introduction Quite often consumers have certain doubts as to whether they should check their credit score because it may have a detrimental effect on it. Due to this concern, many people fail to check their scores. However, a credit check does not mean that your credit score will decrease. As long as you use reliable services and check it yourself there should be no problem in checking your credit score as frequently as you wish without it having a negative impact.
What Goes into Your Credit Score? A credit score is a numerical value, which can range from 300 to 850, that is assigned to a borrower and indicates his creditworthiness. FICO is the most popular type of credit scoring system, which was created by the Fair Isaac Corporation. FICO scores factor in five main categories: FICO scores factor in five main categories:
- Credit utilization ratio – How much of your credit limit you use. This category has the highest weight and will affect your score most significantly.
- Credit utilization ratio – The ratio of your current credit turnover to your total credit limit. In its simplest form, one can lower their score by using more than 30% of the credit limits.
- New credit – How recently you have applied for credits? It is also important to note that having a long credit history and using the credit line responsibly will also be beneficial for your score.
- New credit - Having many new accounts opened within a short period will mean high risk and thus your credit score will be affected.
Credit type – The mixture of credit, for instance, credit cards, installments loans, and mortgages among others.
If you employ credit responsibly in these areas, you will find that checking your credit score frequently has no impact on it.
Why Is It Important to Monitor Your Credit Score Regularly
There are a few key reasons why it is important to check your credit score regularly:
- Raised for errors - Credit reports have errors that bring about low credit scores. By checking often, one is in a position to challenge mistakes within a short time and possibly rectify them.
- Stop fraud – If someone tries to open an account in your name or even several accounts, it will appear on your credit report. Monitoring allows you to identify fraud immediately.
- Monitor progress – It’s encouraging to see that when you make regular efforts to improve your credit by paying bills on time, paying down balances, etc., you can monitor the improvement.
- Check frequency helps see the big picture – Due to the frequency of updating your balances and payment records, checking offers a better picture of your credit usage than checking once in a while.
Loans – Any big expenses, for instance, buying a house or a car, means you need a loan, so you should check your score first to get the best rate.
How To Monitor Your Credit Score Without Hurting It
There are several ways to check your credit score without any risk:
AnnualCreditReport. com This is an official site where you can get your credit report from Equifax, Experian, and TransUnion once a year, and it is free. The knowledge activity of checking your annual report does not impact the score. Although it doesn’t tell you the score it gives all the details in your credit report.
Some Credit Cards Today, more and more credit card providers provide free FICO scores in monthly statements or even on a special webpage for the cardholder. Some examples of such credit card companies are Capital One, Discover, and US Bank. Navigation to the statement does not result in score fluctuations.
These sites or services simplify the process of getting your latest credit scores either online or through mobile apps and use FICO or VantageScore models. The subscriptions available include trial options, free services with limited functionality, or monthly fees without affecting the credit score through a “soft inquiry. ” Hard credit inquiries from a credit application reduce scores for a short time.
However, do not use any of the companies that would ask for your social security number or any other service that promises a quick increase in your score. So as long as you check your credit report or credit score without permitting others to make hard inquiries on your credit report, then there is no way you can be affected negatively but only the benefit of knowing your score. Monitoring services also offer notification of any form of activity that is considered improper.
The Takeaway It is wise to check your credit score often and use reliable sites to do so, in this way, you can track your credit health over time and notice any problem as soon as possible. It does not harm your credit but instead assists you in protecting it and even making positive changes. Therefore, do not be concerned about looking at the score as frequently as weekly or monthly. However, as a word of caution, ensure that you use credible sources, beware of scams, and monitor your progress!
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