Checking your score too frequently may not give you the results you’re looking for. (iStock)
Checking your credit score regularly is an important financial habit, especially if you have poor credit. It can not only help you understand how your actions affect your credit but also make it easier to spot and address potential issues quickly.
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Depending on how you’ve handled credit in the past, your score may fall into one of the following ranges:
- Exceptional: 800 to 850
- Very good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Very poor: 300 to 579
You can check your credit score for free with Credible to determine where you fall on the above spectrum. If you're unhappy with your credit score, don't worry: Credible's credit monitoring partner can also offer advice on how to improve it.
Just note: If you check your score too often, though, you may not be giving it enough time to update. Here’s what you need to know.
Here's how often your credit score changes
Your credit score is a numerical representation of your credit history, which is cataloged in your credit reports. Experian, Equifax and TransUnion are the three national credit bureaus that maintain your credit reports.
But how often do your reports, and thus, your credit score, update? The answer to this question isn’t clear-cut. Creditors typically report information about your accounts every 30 to 45 days, but they don’t all report at the same time.
As a result, your credit score could update several times throughout the month or even multiple times a week, depending on how many credit accounts you have.
With Credible, you don't have to guess whether it will take weeks or months for an update to appear. Credible offers a free credit monitoring service that not only gives you regular updates on your credit score but also provides insights on how you can improve your score.
Who is responsible for credit scores?
Technically, the service you’re using to monitor your credit updates your credit score, but there are a lot of players in this process.
If you don't already have a credit monitoring service then you should check out some of Credible's vetted partners. Let them do the heavy lifting and alert you when there are any potential problems.
Remember, your creditors are the ones that report your account activity, such as your payment history, balance and other information, to the credit bureaus. The bureaus then update your credit report with the most current information.
Then the credit monitoring service you’re using, whether it’s Credible, one of the credit bureaus, your bank or credit union, or another company, uses a credit scoring system to recalculate your credit score based on the new information.
There are many different credit scoring companies out there, but the most popular ones are FICO and VantageScore. Each model considers data differently, so you may see different scores, depending on where you look.
It’s also important to note that credit monitoring services typically don’t update your credit score every time your creditors send updates to the credit bureaus. Instead, they may choose to recalculate weekly, monthly, or sometimes even quarterly.
5 BENEFITS OF HAVING A GOOD CREDIT SCORE
Why is a good credit score important?
When you apply for a loan or credit card, lenders use your credit score to help determine your interest rate and other terms. The higher your credit score, the lower risk you pose to lenders because you’ve developed a solid credit history and manage your balance well.
As a result, a high credit score can help you qualify for the best interest rates on loans. It’s not a guarantee, though. Lenders consider several other factors, too, including your income, other debt, actual information found on your credit reports and more. But building and maintaining an excellent credit score can go a long way in helping you get affordable financing.
If you’re considering a personal loan, visit Credible to compare interest rates and lenders offered to you based on your current credit score.
HOW TO CHECK YOUR CREDIT SCORE FOR FREE WITHOUT PENALTY
Beware of soft and hard credit inquiries
Virtually every time you apply for credit, the lender runs hard credit inquiries on one or more of your credit reports. When this happens, it typically only knocks a few points off your credit score, but the more times you apply for credit in a short period, the more damage it can do.
However, there are situations where lenders and others make just soft credit inquiries on your reports. A soft credit check doesn’t return as much information as a hard credit check, but it can still give them valuable information.
Soft credit checks typically occur when you get prequalified for a loan or credit card or when a lender sends you a preapproval offer. It also happens when an employer or landlord runs a credit check or when you check your own credit score.
For example, you can check your credit score through Credible's partners as often as you want, and it won’t hurt your credit.
HOW DO REWARDS CREDIT CARDS WORK?
The bottom line
Checking your own credit score often is important, but you don’t necessarily need to do it daily. As you keep track of your credit, watch out for sudden dips that could be a sign of a significant issue.
Also, check your credit reports every few months through AnnualCreditReport.com to look for potential identity theft and inaccuracies, which you can dispute. If you find something amiss, take steps immediately to address it.
It's also worth signing up for a credit monitoring service so you can stay on top of all changes to your credit score and beyond. Credible can get you set up with one of their approved partners.
If you're unsure where you stand and don't know where to start, consider reaching out to a financial advisor for help.
UNEXPECTED CREDIT REPORT ITEMS SHOWING UP? THIS COULD BE WHY
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How often does your credit score change? - Fox Business
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