How to Keep an Eye on Your Credit

Credit: One hears all the time that not keeping a constant watch on one's credit score will instantly lead to life-crushing identity theft, financial problems and life in a van down by the river. I know it well, I helped to spread this particular message for several years. But it's not really true.

A friend recently wrote me to ask about watching her credit:

I'm finding myself a bit lost in my internet searches trying to determine what the best way is to keep an eye on my credit score. Do you have any advice on whether it is worthwhile to use a monthly or annual monitoring service, or do you just check your credit report with each agency once a year on a rotating basis? If you use a monitoring service, what do you use?

If you're planning on buying a house or something else huge in the next year, I would invest in a credit monitoring program. TransUnion and Identity Guard both have offers that are pretty reasonable and give you good access to your data. It's a good idea because you want to make sure you have the highest score possible before you apply. But be very careful about making changes in an attempt to boost your score a few points - more often than not, these changes can lower your score.

If you're not on your way to buying a home, don't bother. You can check your credit reports online for free once a year here - https://www.annualcreditreport.com/ - and upgrade for $7 to your FICO score from Equifax (don't pay for the other two scores - they're junk). As long as the data is pretty much the same on all three reports, that one FICO score will be plenty.