Whether you’re in the process of rebuilding credit or your credit is (and always has been) stellar, monitoring your credit is a must. Even if you manage your credit well, and have no negative activity to speak of, mistakes happen, and so does identity theft. Negative listings could appear on your credit report erroneously, or as a result of someone getting a hold of your personal information and using it to use or open accounts in your name, without your knowledge.
On the flip side, credit monitoring will also help ensure that all of your positive activity is being documented accurately and often in the form of credit accounts in good standing via timely payments and low credit utilization ratios.
To monitor your credit effectively:
1) Check your credit reports every six months, or at least once a year. Be sure to get your report from all three major credit bureaus — Experian, TransUnion and Equifax. You are entitled to one free credit report each year, meaning you need only purchase your reports once a year if you are, indeed, checking your credit every six months.
2) Keep an eye on your credit score. This is especially insightful when you are rebuilding bad credit, as you can see how your score is impacted by positive activity. This can really provide any extra incentive you may need to keep up the good work, as it is really exciting to see just how much your score can improve with responsible use of credit on a regular basis.
3) Consider a credit monitoring service. This is helpful for keeping an eye on your credit score on regular basis throughout the year. While there are some services you can pay for, there are plenty of free options too. If you want to give free credit monitoring it a try, CreditSesame.com and CreditKarma.com are good places to start.