How to Monitor Your Own Credit For Free
There are three major credit reporting agencies (Equinox, Experian, and TransUnion) that track your use of credit and record your credit history. They also calculate your FICO scores which companies use when you’re planning to finance a home, car, or secure another loan. The FICO comes into play mainly when you are looking to borrow money or lease something, too.
It’s important to keep track of the records and make sure that everything is correct on these reports as they can have a major effect on your financial options. How does one do this without spending money to monitor?
Enter Annual Credit Report Dot Com
About ten years ago I learned I was able to pull my credit reports once per year from each company through the site AnnualCreditReport.com. Each credit reporting agency has to provide you one credit report annually for free by law. This site makes it super simple and secure to pull those free reports. When I learned about that option, I’d pick two or three of them at a time and wait a year to check again.
If you find a site that wants credit card information to pull your free credit report, skip it. I use AnnualCreditReport.com and have never been requested to sign-up for anything or give credit information to pull our reports.
Our Free Credit Tracking Method
A few years into checking my reports annually, I learned about a manageable way to track your credit report year round for free. Instead of monitoring Equinox, Experian, and TransUnion at the same time each year spread out those credit checks to every four months or 3 times per year. One per company at those three times.
In essence, every four months we’re tracking our credit and keeping tabs on any changes or concerns before it goes on for a year or more. Also, this gives the reporting agencies enough time to update any new accounts or closed accounts.
It also gives you a regular check-up without costing you a monthly or yearly fee to do so. When you think about it, each reporting agency should have relatively the same information. So, you don’t need three copies of that at the same time.
Are Monitoring Services a Must?
Now, that might not give you enough peace of mind if you currently use a reporting service to track and think this won’t be enough. If your identity has been compromised, I highly recommend keeping track through a monitoring service. You can’t go wrong there. Though, I do have experience using a credit monitoring service for a year, which cost us nothing, to compare my method too.
In 2014, I was immersed in the Target credit card hack and received free credit monitoring for a year. What worked out great was that we were buying a house in that year, so every time a mortgage company or other company reviewed my report I received immediate notification. I didn’t get notified often, but it made me realize how many soft inquiries were on my report from companies trying to win my business.
I didn’t find there to be as many hits to my credit report in that period as I would’ve thought. I remember going through months at a time forgetting I even had a such a service working on my behalf. I believe I received about two total notifications of hard inquiries, of which both were ones we enacted.
Soft inquiries happen all the time, which they report, but those are for promotional materials or sales and marketing to get you to open a new card or offer you a new service. They are not as much to worry about as hard inquiries or opened accounts.
What Should You Do?
If you’re in debt and working to get your financial house in order, maybe skip spending extra on credit monitoring and put that toward a debt for now. Try this method for a year. You can always change your mind.
If you’re not checking your credit report annually for free, you should start. Just make it a regularly scheduled item on your to-do list and check in every four months. I know many who now check on their children’s reports just in case the might be a victim of identity theft as well.
The method we’ve been using for several years now is one I’m pretty confident in, and it costs us nothing in the process. I have it scheduled on our calendar, and it takes about 5-10 minutes to pull both of our reports. It’s come in handy to make sure credit companies have closed accounts I’ve requested and that all our debts are listed as paid off. I also enjoy seeing accounts fall off the report.
Your credit report is important for borrowing but sometimes comes into play for car insurance and other companies (maybe even employers?). I believe if we were to enter into borrowing money I might monitor more often or care about my FICO score, but at this time we have no plans to borrow again.
Try this simple way to keep a good eye on your financial house and let me know how it works out for you.