How Frequently You Should Check Your Credit Score and Why It Matters?

Credit score, a three-digit number between 300 and 850, tells a person's creditworthiness. Higher the credit score, more financially responsible you are considered. It takes sincerity, punctuality and a responsible financial behaviour to maintain a good credit score.

Now, after doing all you can to keep your credit score up and high, you will not want a fraudster to use the account wrongly and lower down the score for you. You will not want any error made that could lower down the score, thus impacting your ability to get loans and credit approved in the future.

Checking the credit score regularly helps keep a check on its value. Let's study the same in further detail.

Why Check Credit Score/Report Frequently?

Here are some of the main reasons/benefits of checking your credit score and credit report periodically:

• To identify mistakes/errors, as such inconsistencies may impact the credit score negatively and prevent you from experiencing the benefits of a high score
• To combat identity theft, as sometimes a fraudster may be suing your account without your knowledge, benefitting from it and causing you financial loss
• To stay financially well-off, as correct credit information in a credit report helps you claim your rightful advantages
• For a good credit score which could otherwise go down due to theft or error
• Sooner recovery from any identity thefts as regular checking can help in their early identification
• For the credit bureaus to get only the correct details related to any person's creditworthiness
• Also, to avoid the presence of any unrecognized account and incorrect balances
• Catch any inaccuracy before it causes you financial harm
• It further helps avoid any data leak and lets you report to the authorities in case you suspect a fraud

How Frequently Should You Check Your Credit Score

It is advised to check your credit score/report at least once a year.

However, there can be circumstances when you would additionally want to give it a check yourself.

Once A Year

When you give an annual check to the credit details, you get to keep everything right and accurate. It removes any worries regarding your credit score and credit report, and lets you step further if anything inappropriate appears. One may choose to give the check four times a year to stay well-informed of any changes made in the report.

You may also like "How to Improve Your Credit Score After Missing an EMI?"

When Planning A Large Purchase

Making a large purchase through a credit card is not always the right move. You may still go ahead after checking various related aspects such as the remaining credit limit, the current credit score, etc. Make the check three months before buying a house or car, as that would give you time to improve the score and correct and inaccuracies. It will also help you resolve issues pertaining to frauds or errors.

Post an Identity Theft

In case you have become a victim of identity theft, start checking the report more frequently. It will help you monitor and track the progress of recovery till complete restoration. Long-term damage can thus be avoided.

During A Major Life Event

Major life events like marriage, graduation, divorce and retirement also call for a credit score check. Marriages often make you open joint accounts, joint credit cards and joint loans. Your spouse can also be a co-applicant in your credit product. This impacts your individual credit score because the financial habits of your spouse may be different. Any losses can be monitored by checking the report.

If there is a divorce, the credit scores can be impacted due to shared accounts. Taking loan for college graduation and the management of such loans also influence the score. And when it comes to retirement, your management of a new fixed income can also bring changes in your credit management.

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Because all this impacts the score, credit report checks on a regular basis helps notice any downfall and gives you a chance to make improvements. For example, you will know if your score is affected due to missed EMI payments or due to new loans like a mortgage for downsizing, a vacation home. Even positive impacts will encourage you to keep up the responsible behaviour.

You may also want to check the credit score when there is a data breach or when you get to know that your score has changed for similar reasons.

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