Your credit score is an important metric when you’re looking for a home mortgage. This number, based on your payment history, debt-to-credit ratio and other criteria, determines whether you qualify for a mortgage, how much interest you pay on the principal and it can even be a factor for whether you get a job. In other words, it’s a big deal, and a poor score can follow you around like an albatross.
Since this score plays such a pivotal role in your life, it’s crucial you pay attention to any fluctuations in it. While you might have checked it once or twice in the past to get an idea of where you stand, you should consider checking more frequently – particularly if you’re trying to improve the number.
When should you check your credit score?
Your credit score is based on your credit report, which is a detailed document describing your history handling borrowed money, such as credit cards, car loans and/or a past mortgage. As your lenders provide information to the three major U.S. personal credit monitoring agencies – Experian, Equifax and TransUnion – these agencies modify your credit score accordingly.
This means that if you’re busy fixing errors on your report, paying off past due notices and otherwise taking steps to improve your score, there’s a chance it can update each month. So if you’re spending every day checking in, you might be disappointed. A once-a-month review might be the better solution for you.
However, it’s important to remember that short-term changes are less common than long-term ones. As noted by Credit Karma, tracking your credit score over an extended period of time will provide you with a more comprehensive view of which way it’s trending. For instance, just because your score hasn’t budged over two or three months doesn’t mean you are less likely to experience a 60- or 70-point improvement over the course of an entire year.
External factors altering credit scores
In addition to checking how your credit information might have changed each month based on your own actions, the monitoring agencies also modify how and what they collect to ensure accuracy. So even if you’re not actively trying to improve your credit score, it’s not a bad idea to continue periodically checking in to see if any external factors have impacted it.
For example, the Consumer Financial Protection Bureau recently provided recommendations on how the big three consumer reporting companies compiled credit reports and calculated those three critical three-digit scores, according to The Wall Street Journal. In response, the three rating agencies will implement better quality control systems and improve the accuracy and operation of the scoring calculations. However, as the source noted, these changes won’t drastically affect your credit score.
Ultimately, you don’t need to check your credit score every day, but make sure to regularly make a point to do so, say on the first of every month. This provides both a good short- and long-term strategy without you having to stress over this every day.