By Jennifer Tucker
July 24, 2024 | 4 Min. Read

A good credit score is a critical aspect of financial well-being. It can open the door to financial opportunities, from getting a mortgage to locking in the best rates on loans and credit cards. However, maintaining your credit requires regular monitoring and proactive management.

In this blog, you’ll meet two friends, Oliver and Jesse, who take different approaches to managing their credit. Their experiences offer valuable lessons on the importance of regularly checking your credit report and proactively managing your credit score.

Oliver is a young professional who recently graduated from college and started working for a marketing firm. He’s meticulous about his finances and keen on building a strong financial future.

Oliver’s goal is to buy a house within the next five years, and he wants to ensure he’ll get the best possible mortgage rate. He’s also thinking about starting a side business, which means he may need a small business loan.

Oliver checks his credit report regularly, rotating between the three major credit bureaus. He also uses a free credit monitoring service offered by his bank to stay in the know about changes to his credit score.

One day, Oliver received an alert from his credit monitoring service about a new inquiry on his credit report. Knowing he hadn’t applied for new credit; Oliver immediately checked his credit report and discovered a fraudulent credit card application. He contacted the credit bureau and the creditor to dispute the inquiry and prevent potential identity theft. Whew—crisis averted!

Because Oliver monitors his credit regularly, he can quickly catch and resolve errors and potential threats. His vigilance ensures he maintains an accurate, high credit score. And when the time comes for him to apply for a mortgage or a small business loan, Oliver can rest assured that he’ll qualify for the lowest interest rates.

Jesse works as a graphic designer. She’s a bit more carefree with her finances, believing that as long as the bills are paid, there’s no need to worry about pesky things like credit reports.

Like Oliver, Jesse dreams of buying a home someday, but she hasn’t set a concrete timeline. She lives in the moment and prefers not to think too much about financial details.

Jesse rarely checks her credit report, only once every few years, if prompted by an unusual situation. She doesn’t see the value in regular credit checks and is unaware of the free credit monitoring services to help her stay on top of her credit score.

Recently, Jesse applied for a new credit card to take advantage of a rewards program. Unfortunately, her application was denied. Confused, she checked her credit report for the first time in years. She discovered several negative marks, including a few late payments and a collection account from an unpaid medical bill she’d forgotten about.

Jesse also found a fraudulent account that had been damaging her credit for over a year. Disputing these errors and rectifying her credit report was stressful and time-consuming—it was exactly how Jesse preferred not to spend her time!

Because Jesse neglected her credit report for so long, her credit score was significantly lower than Oliver’s. When she’s ready to apply for a mortgage, she likely won’t qualify for the same low interest rates, which means she’ll spend much more over the life of the loan.  

So, should you monitor your credit score? You bet you should! If Jesse and Oliver’s experiences have you wondering how to monitor your credit effectively, we have answers to the most frequently asked questions below. These tips make staying on top of your credit score easy.

The three companies that report credit scores are Equifax, Experian, and TransUnion. These credit bureaus gather information on you and your financial history, which is the basis for your credit score.

It’s a good idea to check your credit score monthly and obtain a full copy of your credit report annually. Many banks and credit unions offer you free access to your credit score, allowing you to keep a close eye on it.

You can get a free copy of your credit report once every 12 months from each of the three major credit bureaus through AnnualCreditReport.com

The best places to check your credit score include:

The following steps can help you effectively monitor your credit score:

There are several steps you can take to verify your credit report:

You can check your credit as many times as you want without affecting your credit score. Checking your own credit is known as a “soft pull.” Unlike a “hard pull,” which occurs when you apply for credit and can temporarily lower your score, soft inquiries don’t hurt your score.

Late payments are just one type of misstep that can create a negative mark on your credit report. Negative marks can stay on your credit report for varying lengths of time:

Learn more about how negative marks affect your credit report here.

If you find an error on your credit report, you should:

Learn more about how to dispute an error on your credit report here.

In closing, let’s reflect on the lessons we learned from Oliver and Jesse’s stories:

Keeping a close eye on your credit score can help you quickly identify and resolve errors, protect yourself from potential fraud, and ensure your credit accurately reflects your financial behavior. On the other hand, neglecting to monitor your credit can lead to unwelcome surprises and long-term financial consequences.

Remember, taking a few simple steps to manage your credit today can make a significant difference in your financial future.

Learn more about How to Build Credit and Understanding Credit.