Ways to Monitor Your Credit Score Effectively: a Guide

Editorial Note:

Let us introduce our friend Joe. Joe thinks that just because he has good credit habits today his credit is fine. He doesn’t monitor his credit score as often as he should. Unless he’s applying for a credit card or a loan, he thinks those three digits aren’t important. Unfortunately, when his credit application is denied, he goes into a tailspin.

Don’t be like Joe. He had the best intentions, but he didn’t understand the value of monitoring his credit report regularly. He didn’t realize that his credit score is a reflection of his general financial health. If he had reviewed his report on a frequent basis, he would have caught any problems early. He could have made a plan to correct small problems before they turned into big ones.

Reasons To Monitor Your Credit Score Regularly

There are a number of really good reasons for monitoring your credit score often. You may find that one, some, or all of the reasons are applicable to your situation.

  • Knowing your current situation. Your credit score is a crucial indicator of your overall financial health. You should have a fairly accurate idea of your economic status at any given time.
  • Maintaining (or improving) credit health. There is no quick fix for bad credit. Your credit history uses the last seven to ten years of data available. Any (positive) changes take months to be reflected on your credit report and your credit score. By regularly checking your score, you buy yourself some time to correct any problems in your credit history. This will strengthen your case when you are applying for credit in the future.
  • Ensuring credit accuracy. Your credit score is a numerical interpretation of your credit report. If your score is low, it should be a sign to check the report and make sure it is accurate. Credit issuers and credit bureaus are required to investigate any claims of errors in your reported credit history. If the claim is valid, they must remove it and readjust your score.
  • Greater confidence when submitting applications. If you know your score when you seek credit approval, you won’t be caught unaware by the results. You will make better decisions as to the credit cards for which you should apply. If you’re confident that you’ll be approved, your score will give a better estimation of terms like your interest rate.
  • Determine how actions affect your credit score. You are able to see the effects of specific actions on your credit score. For example, you will see how your score adjusts after opening a new account or paying off a balance.
  • Quicker response to changes. With regular monitoring, you’ll be alerted sooner if there is a significant negative change to your score. You can refer to your credit report to determine the cause, then work to recover the difference in points.
  • Have the option to qualify for better credit offers. Higher credit scores get better offers. This could be higher limits, better interest rates, or better bonuses or perks. Armed with this knowledge, you can negotiate a lower interest rate or a higher limit with your creditors.

Credit Score

Using Free Services To Check Your Credit Score

There are a number of companies that offer customers free access to their credit scores. Be aware that not all third party sites are free, or even provide accurate scores. Assess the site’s terms before you sign up for anything. A comparison of the more popular choices is shown below.

CompanyPulls Score Based
on Information from…
AppScoring System
CreditKarma.comTransUnion
Equifax
iOS and AndroidVantageScore 3.0
CreditSesame.comTransUnioniOS and AndroidVantageScore 3.0
FICO Open AccessFICONoFICO
MintEquifaxYesVantageScore
Bank/Credit UnionFICODependsFICO

Both CreditKarma.com and CreditSesame.com allow you to view your scores without registering a credit card. In exchange for the free access, they market credit card recommendations to their customers. CreditKarma and CreditSesame update your scores once a month and give access to your credit history. The sites use VantageScore 3.0, an informational score for consumers, instead of the FICO scores lenders use. VantageScore 3.0 provides a fairly accurate estimate for your score based on your credit history. CreditKarma gives you access to a credit score simulator. This allows you to play “what if” with different scenarios to see the impact on your score. CreditSesame provides their customers with $50,000 identity theft insurance for free.

Credit Cards With Free Credit Score

FICO has partnered with certain credit card issuers through the FICO Open Access program. (To date, these include Discover, Bank of America, Barclaycard, American Express, and the Walmart Credit Card.) Users will receive a copy of their FICO score and a statement of major components affecting their score for free. This will accompany their monthly statement.

Your bank or credit union may already offer free credit scores to its customers. You may already be eligible or could be within reach of it. We recommend that you contact them to learn for which services you may qualify.

If you prefer a premium service, you can consider the following companies.

CompanyRegular Cost OffersScoring System
TransUnion$19.95 per monthTransUnion credit score and credit report
Monitoring for all three major credit bureaus
Instant alerts and Credit Lock for suspicious activity
Access to TransUnion Online Credit Score Simulator
VantageScore 3.0
Equifax$15.95 per monthEquifax credit score and report
Free access to Lock & Alert (separate sign up)
VantageScore 3.0
Experian$4.99 for the first month, then $24.99 per monthExperian FICO8 score every 30 days
Credit monitoring and alerts
Upgrade to scores from all three bureaus for $39.95/month
VantageScore 3.0
MyFICO.com$19.95 per credit bureau OR $47.85 for all 3Monitoring for all three major credit bureaus
Tools for re-establishing compromised identity
Access up to 28 separate types of FICO scores
Threat detection
FICO
Fast3CreditScores$19.95 per month14 day free trial
Monthly scores from all three credit bureaus via CreditXpert
Daily credit monitoring
Instant alerts for suspicious activity
Support services to help with identity theft
Proprietary
(not a FICO score)

If you are considering these sites, pay attention to the following. For customers currently using the service, TransUnion offers $1 million of identity theft insurance. Equifax, TransUnion, and Experian allow you unlimited monitoring, but MyFICO limits you to once every three months. Despite this, MyFICO still offers daily credit monitoring and credit repair tools if there is a problem.

How Often You Should Check Your Credit Score

Credit Score Monitoring

Remember our friend Joe from the introduction?  He has learned the importance of monitoring his credit score. Now he checks his credit score a couple times a year to make sure everything is going as it should. You should monitor your credit score regularly. You can do it twice a year, or every month if you prefer. If you’re going to need credit soon for a large purchase, you should probably check it more frequently. For example, you may check your credit score monthly if you’re planning to buy a house or a car. If you monitor your credit score, you can begin to fix any problems you see. Then you can have confidence in your credit score, just like Joe.

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