When’s the last time you checked your credit history?
Although we’re all familiar with the catchy jingles and cutesy commercials advertising free credit report access, it’s all too easy to forget about that important little three-digit number—especially if you’re not actively in the process of seeking out a new loan or refinancing an old one.
But when you do find yourself in need of new financial products, your credit score can be a make-or-break factor. And if someone else is using your information and wreaking havoc on your report, knowing now can help.
Enter credit monitoring: a service that can help you keep tabs on your credit history without having to do any of the investigative footwork yourself.
Here’s what you’ll want to know about credit monitoring, as well as finding credit monitoring services you don’t have to pay for.
Credit monitoring alerts you to changes in your credit history, such as when a new account is opened or an old one is paid off.
While it can’t prevent fraud or identity theft, credit monitoring can warn you about suspicious activity on a close-to-real-time basis—which can give you a pretty serious advantage when it comes to nipping fraud in the bud.
Although specifics will vary depending on the service you select, credit monitoring programs can notify you within as little as 24 hours of major changes to your credit report, including changes to personal information like your street address, significant balance changes, account closures, or hard inquiries.
Since you’ll receive a text message or email when any of those events happen, you’ll be able to take immediate steps to rectify the problem if it isn’t a change you made yourself—by filing a dispute with the reporting credit bureau.
So why is it so important to keep a careful eye on your credit report in the first place? Your credit history can have a serious impact on your ability to make big financial decisions like purchasing a home or buying a new (or new-to-you) car.
If you’ve got a spotless report, you could get better interest rates on new loans. On the other hand, if your score is what’s considered poor, you could be denied access to certain financial products altogether.
Even if you’re diligent about abiding by best credit practices (more on that in the next section!), if someone has unauthorized use of your information, they can quickly sink your hard-earned credit score.
That’s when credit monitoring comes in handy: If you see an alert corresponding to a change you didn’t make, you’ll know something’s up—and hopefully be able to get it taken care of before it spirals out of control.
Factors That Go into Your Credit Score
So how is your credit score calculated?
It’s helpful to understand that there’s actually no such thing as one, single credit score; a variety of different consumer reporting agencies calculate and report credit ratings, all using different criteria and metrics.
The most commonly used credit score is designated by the Fair Isaac Corporation, also known as a FICO score, which ranges from 300-850. These scores are calculated and reported by the three major credit bureaus, Equifax, TransUnion, and Experian, all of which may calculate different scores based on their access to your personal information.
Those three-digit scores correspond to a creditworthiness scale, which runs as follows:
• 300-579: Very Poor
• 580-669: Fair
• 670-739: Good
• 750-799: Very Good
• 800-850: Exceptional
Although specifics vary from lender to lender, generally the better your score, the more access you’ll have to financial products like loans and credit cards—and if you have very good credit, you may get better terms and lower interest rates.
Your score is a reflection of the specific information inside your credit report, such as your total debt burden and your timely payment history. Here are the credit history factors that determine your credit score and how heavily they’re weighted in the calculation:
• Payment history: 35 percent
• Amounts owed: 30 percent
• Length of credit history: 15 percent
• Credit mix: 10 percent
• New credit: 10 percent
Given the relative weights of different credit-related behaviors, some of the best ways to build your credit include keeping your overall balances low and paying your accounts on time every month.
Keeping old accounts open and active can help you increase your overall credit history length, and having different kinds of credit lines—such as consumer credit cards, installment loans, and a mortgage — also work in your favor, though they’re a smaller slice of the overall credit score pie.
Of course, if someone else is using your information to open new accounts or max out your existing credit cards, all your hard work can be erased in a flash. A string of hard inquiries or a sudden spike in your debt total can quickly become a serious problem for your credit history—especially when you don’t have access to those accounts yourself.
That’s why it’s so helpful to check your history from time to time to ensure everything is good—a chore that can easily be automated with a credit monitoring service.
Staying Up to Date with Your Credit Score
So how do you go about getting credit monitoring, and how much should you expect to pay for it?
The good news is some level of credit monitoring is widely available from a range of financial companies, including banks and credit card issuers who include it as an unpaid perk with your account.
Fortunately, if you’re already a SoFi member, you don’t have to worry about outsourcing this important task—or paying for it!
SoFi Relay offers free credit monitoring that’s already built into the easy-to-use app that helps you plan and budget.
If you decide not to use a credit monitoring service, consider taking advantage of your once yearly free credit report.
You can use the official website, annualcreditreport.com , which is the federally-authorized source.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SoFi’s Insights tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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