Should I Monitor My Credit?

Although a good credit score is critical to get a good interest rate on a mortgage or the lowest possible insurance rates, many people feel that monitoring their credit score (How Credit Scores Are Calculated) is a tiresome chore that they don't need to do because their credit is good. However, the rise in identity theft makes it prudent for everyone to monitor their credit – no matter how good it is – because that’s often how the first signs of fraudulent activity are detected.

Here are three things you should know about monitoring your credit:

• It's easy, and it's free. Federal law requires credit bureaus to give you a free copy of your credit report once a year. The only website where you can take advantage of this benefit from all three bureaus is annualcreditreport.com. Be careful! There are a lot of look-alike websites which claim to be free but will give you only a limited amount of information before charging you to get your full history or your credit score.

• If you want to check your credit more than once a year, you’ll need to subscribe to a credit monitoring service. Each has different pros and cons, so you’ll want to do a little comparison shopping to choose the right service for your needs. Credit Karma, for instance, updates their information weekly, whereas others only update every 3-4 months. The downside is that Credit Karma only pulls TransUnion and Equifax reports. You’ll need another provider, such as Quizzle, to check up on your Experian report.

• You might already have access to your credit score and not know it. Wells Fargo, Discover, and other banks allow you to check your credit score and/or recent credit activity monthly through their mobile app. They don’t track your score for you, though, so it’s up to you to compare it month to month.

With so many ways to monitor your credit, it just makes good sense to keep up with it since a good credit score can save you a lot of money and headaches. Also keep in mind, that if you’re married, you should be monitoring your spouse’s score, too.

-Jasmine Pettaway-

Update: WalletHub is an alternative to Credit Karma