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How Often Should You Check Your Credit Report?

Sean Cooper

Aug 11, 2021 6 min read

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How Often Should You Check Your Credit Report?
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    You should check your credit report at least once a year at a bare minimum. It’s also a good idea to check your credit report before making any major purchases, such as a home or a car, and before applying for any financial products, such as credit cards and loans.

    Although checking your credit report once a year is the bare minimum suggested, it’s far better to check your credit report at least once a month. This way, you can spot any errors or fraud on your credit report that you otherwise might not have noticed until months later. Errors on your credit report can hurt your financial health.

    We suggest checking your credit report monthly because most lenders report to the major credit bureaus monthly as well. When a lender reports your credit history to Equifax and TransUnion, your credit report and credit score can change.

    Lenders don’t report to the credit bureaus all at the same time. This means your credit report and credit report could change a few times throughout a given month. As such, you might want to consider checking even more frequently. For example, Borrowell allows you to check your Equifax credit report for free on a weekly basis. This can help you stay on top of any potential changes to your credit file as lenders report your regular payments to Equifax.

    Why Is It Important to Check Your Credit Report Frequently?

    There are 4 main reasons why it’s important to regularly check your credit report. Proactively checking and reviewing your credit report can help you:

    • Spot errors on your credit report

    • Find wrongly reported late payment

    • Identify identity theft

    • Understand what negative information is impacting your credit score

    Be on top of Incorrect information

    Your credit report may have information that’s outdated or simply not accurate. Incorrect information can impact your credit score and could prevent you from qualifying for credit and financial products. Here are some common examples of credit report errors you should look out for:

    • Personal information errors, such as the wrong name, phone number, address, or date of birth

    • Closed credit accounts listed as open

    • Duplicate accounts

    • Mixed accounts, or accounts belonging to someone else with the exact same name

    • Incorrect payment statuses, such as credit card or loan payments being flagged as late payments

    Late Payments wrongly reported

    You may have made all your payments on time. However, if your credit report says otherwise, you’ll need to contact the lender to resolve it. This can take time and affect your ability to get credit in the meantime.

    Identify Identity Theft

    If you only check your credit report once a year, a lot of damage can be done by someone trying to steal your identity. If you don’t recognize a new credit card or loan account on your credit report, you may be the victim of identity theft. Checking your credit report regularly can help you spot any sudden identity theft or fraud attempts and take the proper steps to limit the damage right away.

    Understand what negative information is impacting your credit score

    Your credit score is like your overall financial grade, while your credit report is like your detailed financial report card. Reviewing your credit report regularly can help you understand what factors are impacting your credit score the most and why your credit score may be lower than you think it should be.

    In What Other Circumstances Should You Check Your Credit Report?

    Besides the suggested frequency of checking your credit report, there are more reasons to check your credit report. 

    Before you take a car loan

    A car loan represents a large sum of money. You’ll want to make sure your credit report and credit score are looking their best, as any blemish can lead to a decline on your car loan application.

    Before you apply for a mortgage

    A mortgage represents an even larger sum of money. Again, you’ll want to review your credit report to make sure everything is accurate; otherwise, it could mean missing out on your dream home.

    To reduce risks of identity theft

    By regularly checking your credit report, you can spot identity theft right away. You can report it to the authorities and take steps to protect and repair your credit score immediately, instead of weeks or months later.

    Before you apply for a new job

    Employers sometimes check your credit report when you apply for a new job, especially if you’ll be working in the financial industry. You’ll want to review your credit report ahead of time to make sure everything is up to date. You wouldn’t want an out of date piece of information to lead to you not getting your dream job.

    How to Get Your Credit Report

    There used to be a time when you had to pay for your credit report. I’m happy to say that’s no longer the case. By providing some basic information, you can obtain a copy of your credit report for free.

    You can sign up for Borrowell to receive weekly updates of your credit report and credit score for free.

    It’s fast and easy to get your free credit report from Borrowell. All you need to do is supply some personal information to confirm your identity to start receiving it.

    The major credit bureaus Equifax and TransUnion allow you to get your credit report as well, but the processes aren’t as seamless and there are sometimes fees involved.

    What Information is Contained in Your Credit Report?

    On your credit report you can find personal and financial related information related to yourself. Information on your credit report includes:

    • Your name

    • Your address history

    • Your employment history

    • Your telephone numbers

    • When your credit report was first opened

    • Credit accounts currently open and closed, including payment history

    Credit Scores vs. Credit Reports: What is the Difference?

    A credit score is a three-digit number that lenders use to determine how likely you are to pay back money that you borrow in full and on time. Credit scores in Canada fall between 300 and 900. The higher your credit score, the better. If your credit score falls between 713 and 740, it’s considered good. If it’s 741 or above, it’s considered excellent.

    A credit report is like a report card on how good you are at borrowing money. It includes both your personal and financial information. For any credit accounts you have open, it includes important details, such as whether you’ve made your payments on time and in full.

    Does Monitoring Your Credit Reports Harm Your Credit?

    No, monitoring your own credit score through a free service like Borrowell doesn’t harm your credit score.

    There are two types of credit inquiries: soft inquiries and hard inquiries. Soft inquiries, such as checking your own credit score through Borrowell, don’t affect your credit score. Hard inquiries, such as applying for a credit card or car loan, do affect your credit score.

    If you check your own credit report through Borrowell, it doesn’t affect your credit score. However, if a mortgage broker requests to check your credit report, it will affect your credit score.

    You can make as many soft inquiries as you like without it affecting your credit score. Hard inquiries affect your credit score, so you’ll want to limit how many you do in a short period of time.

    Final Thoughts

    When it comes to your credit report, the more often you check it, the better. While checking it once a year is the bare minimum, it’s far better to check it on a weekly basis. By checking it more often, you’ll have a better chance of detecting problems early on. This will enable you to take prompt action to resolve them and keep your good credit score intact.

    Sean Cooper
    Sean Cooper
     | 
    Author & Mortgage Professional
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    Sean Cooper is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense.

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