Common wisdom is that if you want to improve your credit, you should first have an idea of where you stand. You need to know what your current credit score is and what you can do to improve it before you can take steps in the right direction.
But one recent Discover survey revealed some interesting news: checking your credit score more often might result in a better credit score.
According to the survey, 76% of respondents who checked their scores 7+ times in a year saw those scores improve. And 72% of those who checked their scores 4 to 6 times in a year saw improvement. But only 38% of those who checked their scores once in a year improved their credit scores.
Why does checking your score more often affect your credit score? And how can you check your credit score frequently without breaking the bank? Glad you asked!
Why does score checking make a difference?
Checking your credit score, in and of itself, doesn’t boost your credit score. But as motivational speakers and moms everywhere like to point out, the best way to meet a goal is to keep track of your progress.
Keeping tabs on your credit score may help increase credit-improving behavior, such as paying bills on time, paying down loans, and maintaining low credit card balances. When you see your score starting to improve and know what you need to do to spur further improvement, you may make even more effort to complete these score-boosting activities.
The bottom line is that just keeping tabs on your credit score can be great motivation for doing what you need to do in order to raise it. So, if you want to get into the 750+ club, checking your credit score frequently may be the key. However, how you check your credit score matters, and you don’t want to break the bank by constantly paying through the nose for your full credit report and score.
Which credit score should you track?
The key to ensuring you’re really making progress with your credit score is to keep tabs on your real credit score. Many free services offer an approximation of your score, but this may actually be different from what lenders see when you apply for a new loan or credit card.
Approximate credit scores can be a helpful tool if you’re at the beginning of your credit-boosting journey. But if you want to understand what’s actually going on, you need access to your true FICO score.
As you’re figuring out your options for getting your real credit score, keep in mind that your scores from different credit bureaus may be different. This is because the information in your credit file may vary slightly from one credit bureau to the next. Different bureaus may also apply slightly different scoring algorithms.
So how do you overcome the problem of having way too many credit scores to track? You have a couple options.
One option is to track your credit score using multiple tools. This way you keep tabs on at least one score from each of the major credit reporting bureaus: Experian, Equifax, and TransUnion. This is the best way to get a complete picture of what score potential lenders are likely to see.
It can also help you spot red flags, such as information that varies from one bureau to the other. These discrepancies may point to inaccuracies in your credit report, which you’ll want to fix as soon as possible.
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The other option is to track one score based on one credit report consistently. This is the best bet if you want to use just one tool, such as Discover’s free Credit Scorecard program. This program, for example, pulls your FICO credit score from your Experian credit report.
Tracking just your Experian score using this tool can give you valuable insight into how your score varies throughout the year, and will let you check it for free each month if you’d like. But if you go with this option, you’ll want to at least pull your credit report from the other two bureaus annually (which you can do for free) to check for mistakes and inaccuracies.
How to track your score without breaking the bank
Whether you choose option one or option two, there are now some great ways to check your credit score regularly. One option is myFICO.com, which offers credit monitoring services starting at $19.95 per month. Or you could monitor your score from all three bureaus for $29.95 per month.
The score from myFICO.com is comprehensive. It will also help you decide the next steps to take when you want to increase your credit score. However, you don’t have to pay for credit monitoring to access your real FICO scores.
You could also go with another credit score-tracking company such as Credit Karma, Credit Sesame, or Quizzle. Each of these sites offers a range of free scores, typically without even requiring a credit card to sign up. For instance, you can obtain your TransUnion score quarterly without charge through Quizzle. Credit Karma also pulls your TransUnion score, along with your Equifax.
Another excellent option is to choose a credit card provider that offers free credit scores. Choosing one of those without an annual fee is even better. Discover, Barclaycard, and Capital One are among the dozen credit card providers offering free access to monthly credit scores.
Signing up for just one of these cards will let you access your score from a single reporting bureau. Or you could use a combination to access your scores from two or more credit bureaus.
However you access your credit score, it’s clear that checking it often will keep you on track. It will encourage you to continue making good financial choices that will ultimately increase your credit score.