When it comes to your credit score, staying current is crucial.
This is where free credit monitoring services can come in. You can often check your credit with your bank or a credit bureau. Many credit card issuers, including Chase, American Express, and Discover, offer free credit monitoring services that allow cardholders to check their credit score regularly. Some even offer credit monitoring if you are not a customer.
One such example is CreditWise, a free credit monitoring service offered by Capital One to anyone wishing to check their credit score. It alerts you to new credit activity, offers detailed information on what’s affecting your score, and gives you suggestions on how to improve it.
Whether you have a Capital One credit card or not, here’s how this free program can help you stay current on your credit and why it’s important to monitor it regularly.
What is CreditWise?
Capital One’s CreditWise is an online tool and application that allows you to monitor your credit score. It uses the VantageScore 3.0 scoring model to measure your credit, provided by TransUnion. This model evaluates criteria similar to your FICO score and you will receive an updated score every week.
You don’t need a Capital One credit card to use CreditWise. While this is a standard offer for Capital One cardholders (and you can access it using the same mobile app), it’s available regardless of which credit cards you hold . There are only two requirements: you must be at least 18 years old and have a valid social security number that matches a credit profile with TransUnion, one of the three major credit bureaus. You can access the tool online, through the CreditWise mobile app, or if you’re already a Capital One cardholder, through the Capital One mobile banking app.
CreditWise has a few additional features that are also useful for measuring credit health. You can use a credit score calculator to see the potential effects that certain actions can have on your credit score, such as paying off a debt or closing a credit card. It also offers credit alerts so you can stay informed about difficult inquiries or new accounts on your credit report, dark web monitoring and social security number tracking to alert you to potential fraud or identity theft.
The free tool also shows you personal factors that can affect your credit, such as the age of your oldest line of credit, the amount of available credit you have, or your credit utilization rate – the ratio between your credit card balances and your overall limit.
Does Using CreditWise Impact Your Credit Score?
CreditWise lets you check your credit as often as you want without hurting your credit score. When you check your own credit with CreditWise, it is considered a simple inquiry into your credit report. Unlike serious inquiries — when an issuer checks your credit to assess a new card application, for example — informal inquiries don’t show up in scoring models, so they don’t impact your credit score or your report.
Why it’s important to monitor your credit
Your credit is a fundamental part of your finances, and regular monitoring can help you keep an idea of your overall financial health.
“Your credit score is one of the most important numbers in your financial life, as it affects whether or not your loans are approved and, if so, the interest rates you’ll be charged,” says Ted Rossman, senior industry analyst at CreditCards.com (like NextAdvisor, CreditCards.com is owned by Red Ventures). “It’s good practice to check your credit score at least every three to four months.”
Credit report errors are more common than you think — one in five finds a mistake on their credit reports at least once in their lifetime, according to the Federal Trade Commission. Proactively monitoring your credit can help you mitigate any credit problems or errors before applying for a line of credit, such as a mortgage or credit card, and protect against identity theft.
How to Check and Monitor Your Credit Score for Free
There are several ways to check your credit score for free, and regular access to your credit report is protected by federal law.
You can sign up for a free service like Capital One’s CreditWise, Discover ScoreCardWhere Experian to see your credit score. Most credit card companies provide your credit score for free when you’re a cardholder – check your monthly bank statement or log in to your account online. If you can’t find it, call your issuer to ask if they can provide you with information about your credit score and where to find it.
Remember that the credit score you see when you check your own credit may not be the same that a lender or issuer uses to assess your loan or credit card application. Your score can vary depending on the credit bureau the lender uses to pull your report and the scoring model they review, but checking your own score is still a great way to get an idea of your credit range.
There is a big difference between your credit score and your credit report. Your credit report is a record of your credit history and describes your effectiveness as a borrower, while your credit score is a three-digit number calculated from your credit report.
To access your credit file, you can go to AnnualCreditReport.com to get free copies of your credit reports each week from the three major credit bureaus (TransUnion, Equifax and Experian) through April 2022.
Your credit score is an important indicator of your financial health, as it affects the loans you qualify for, such as mortgages or car loans, as well as the interest rate and other terms that lenders give you. Landlords, cell phone companies, utility providers, and even some employers also pay attention to your credit.
“This is especially important if you’re planning to apply for credit soon, as it pays to know where you stand and it would be good to have any mistakes corrected before you apply,” Rossman says. “Everyone should check at least a few times a year.”
By checking your report regularly, you’ll be able to know exactly where your debt is, spot opportunities for improvement, and catch errors early.