When it comes to your credit score, staying in the know is crucial.
That’s where free credit monitoring services can come in. You can often check your credit through your bank or a credit bureau. Many credit card issuers — including Chase, American Express, and Discover — offer free credit-monitoring services that let cardholders check their credit scores on a regular basis. Some even offer credit monitoring if you’re not a customer.
One such example is CreditWise, a free credit monitoring service offered by Capital One to anyone who wants to check their credit score. It alerts you of new credit activity, offers in-depth information on what affects your score, and gives you suggestions on how to improve it.
Whether you’ve got a Capital One credit card or not, here’s how this free program can help you stay up-to-date on your credit and why it’s important to regularly monitor it.
What Is CreditWise?
CreditWise from Capital One is an online tool and app that allows you to monitor your credit score. It uses VantageScore’s 3.0 scoring model to measure your credit, provided by TransUnion. This model evaluates similar criteria as your FICO Score, and you’ll receive an updated score every week.
You don’t need a Capital One credit card to use CreditWise. While it is a standard offering to Capital One cardholders (and you can access it using the same mobile app), it’s available regardless of any 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, via Capital One’s mobile banking app.
CreditWise has a few extra features that are helpful for measuring credit health, too. You can use a credit score simulator to see the potential effects that certain actions can have on your credit score, such as paying off debt or closing a credit card. It also offers credit alerts so you can stay informed about hard inquiries or new accounts on your credit report, dark web surveillance, and Social Security number tracking to alert you of potential fraud or identity theft.
The free tool also shows you personal factors that may affect your credit, such as the age of your oldest credit line, the amount of available credit you have, or your credit utilization ratio — the ratio of your credit card balances to your overall limit.
Does Using CreditWise Impact Your Credit Score?
CreditWise allows you to check your credit as often you’d like without hurting your credit score. When you check your own credit with CreditWise, it’s considered a soft inquiry on your credit report. Unlike hard inquiries — when an issuer checks your credit to evaluate a new card application, for example — soft inquiries don’t show up in scoring models, so they do not 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 maintain a sense of your overall financial health.
“Your credit score is one of the most important numbers in your financial life because it affects whether or not you’ll be approved for loans, and if so, what interest rates you’ll be charged,” says Ted Rossman, a senior industry analyst at CreditCards.com (like NextAdvisor, CreditCards.com is owned by Red Ventures). “It’s a good practice to check your credit score at least every three to four months.”
Errors on credit reports are more common than you’d think — one in five people find 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 credit issues or mistakes before applying for a line of credit, such as a mortgage or credit card, and help protect you from 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 under federal law.
You can sign up for a free service like CreditWise from Capital One, Discover ScoreCard, or Experian to view 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 into your account online. If you can’t find it, call your issuer to ask if they can provide information on your credit score and where to find it.
Just remember, the credit score you see when you check your own credit may not be the same one a lender or issuer uses to evaluate your loan or credit card application. Your score can vary depending on which credit bureau the lender uses to pull your report, and which scoring model they look at, but checking your own score is still a great way to get a sense of your credit range.
Pro Tip
There’s a big difference between your credit score and credit report. Your credit report is a record of your credit history and outlines your effectiveness as a borrower, while your credit score is a three-digit number calculated from your credit report.
To access your credit report, you can go to AnnualCreditReport.com to get free copies of your credit reports weekly from the three major credit bureaus (TransUnion, Equifax, and Experian) through April 2022.
Bottom Line
Your credit score is an important indicator of your financial health because it affects what loans you qualify for — such as mortgage or auto loans — as well as the interest rate and other terms lenders assign. Landlords, cell phone companies, utility suppliers, and even some employers pay attention to your credit, too.
“It’s especially important if you plan to apply for credit soon since it’s beneficial to know where you stand, and it would be good to get any mistakes corrected before applying,” says Rossman. “Everyone should be checking at least a few times per year.”
By checking your report regularly, you’ll be able to know exactly where your debt stands, spot opportunities for improvement, and catch mistakes early.