Most people don’t think about their credit until they need it. You likely already know that your credit history plays an important role in your ability to get approved for new lines of credit, whether it’s a new credit card, a personal loan, or another type of borrowing agreement. It also affects your ability to rent an apartment and is sometimes used by prospective employers when you’re looking for a new job.
But it’s not a good idea to wait until a creditor is about to pull your information to check in on your credit. If you’re not aware of what’s listed on your credit report, you could get denied for a new loan or line of credit based on inaccurate information. And each time a creditor pulls your information, it’s considered a hard inquiry. Hard inquiries have a temporary negative effect on your credit.
You should always have a general idea of where you stand. Staying on top of your credit ensures that your report doesn’t have any false or inaccurate information, and also gives you an idea of which areas you can improve. Each of the three credit bureaus offers one free credit report every 12 months so that you can regularly verify the information that’s in your history. You’re also entitled to a free credit report if you are a victim of identity theft, on public assistance, or are unemployed and seeking employment within the next 60 days.