Your credit score changes every thirty days therefore you should periodically check it to ensure accuracy. Each one of your creditors reports your monthly pay habits and fluctuations in the amounts you owe them. Since creditors report any changes with your credit report every 30 days, you should probably check your credit once quarterly. We've heard some people say to check it monthly but feel that is a bit obsessive compulsive.
You are probably thinking why in the world would I want to check my credit every three months. Well consider this possible scenario: your mortgage company accidentally reports a late payment on your credit report, and you actually were not late. Because of this mistake on your creditor's behalf, your credit score just dropped a hundred points. Now you find yourself at a car dealership that lured you in on the zero percent financing offer and because you weren't monitoring your credit report you don't qualify for the special offer. This creditor's mistake just kept you from getting an interest free loan. Most don't realize that this is a common mistake. People make mistakes and as a result more than 25% of all credit reports have errors that cause low credit risk people to get denied. Do I have your attention yet?
Most people think that checking their credit this often will hurt it. This is completely false. There are two types of inquiries. A "hard inquiry" is when you apply for credit and the creditor pulls your credit report. This type of inquiry can have a negative impact on your credit rating. When more than four hard inquiries are reported within a 2 month period your could see a drop. There is a grace period of two weeks when shopping for a mortgage, or a car. The scoring system understands that most people will shop around for the best deal and therefore hard pulls within a two week window are counted as one.
A "soft inquiry" is when an existing creditor grabs your credit to approve you for special offers or you request a credit report yourself through one of our affiliates. Soft inquiries do not lower your score so there is no reason not to take control of your credit report. Save yourself the potential embarrassment of a credit denial but more importantly make sure you are getting the best terms on loans by having great credit.
About the author: John Rasor is the owner of Dallas, Texas based http://www.creditscorecowboy.com/ Credit Score Cowboy is one of the most unique on line resources in the world for free credit score reports, free credit scores, secured credit cards, identity theft protection and a BLOG with a wealth of information about credit and how to raise your credit score.
