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Don’t Check Your Score Every Day

The conventional wisdom is that you should check your credit reports at least once a year and your score only when you need it. This morning, I argued in a Devil’s Advocate post that services make it easy (and free, in some cases) to check your score all the time so you might as well do it.

This is part two of a two part Devil’s Advocate, Angel’s Advocate article in which I argue both sides of an issue. This is the Angel’s Advocate post, here is the Devil’s Advocate post where I argue you should be monitoring your credit score all the time [3]!

Focus On The Report, Not Score

You should be requesting a free copy of your credit reports using AnnualCreditReport.com [4] and spending your time reviewing those for errors, not focusing on your credit score. While your credit score is important, it’s calculated based on your report so that’s where you should spend the bulk of your time.

I know you don’t have a ton of time to devote to your credit report and score, so spend it on the more important of the two.

Credit Score Tiers

In trying to find out what is a good credit score [5], I discovered that the interest rates on mortgages and car loans fell into discrete tiers. On a mortgage, if you had a score between 760 and 850, you could expect a mortgage interest rate of around 4.46% APY. That means that a 761 paid the same thing as a perfect 850. The next tier was 700 – 759, so someone with a 701 paid the same as someone with a 750.

Once you find out which tier you’re in and how far away you are from the next tier, you don’t really need to monitor as closely. This is doubly true if you don’t plan on getting a loan in the near future!

Spend That Time Elsewhere

This morning, I said overchecking your score beats underchecking your score, which is an argument I still stand by. However, it ignores the fact that checking still takes time and it’s time you could devote to other things in your life. Financial fitness is important, of course, but it’s more important to focus on the factors involved in your score, instead of the score itself. Take a few minutes to setup paperless statements and email reminders so you don’t miss payments. Set up debit arrangements do you don’t have to mail a personal check each month. Or, go take a walk around the block and enjoy the outdoors and do absolutely nothing financially related.

I don’t mean to disparage the people who check their score every day but I think it’s unnecessary. I recognize with services like Credit Karma and MyFICO, it takes only a few minutes, so some of my reasons may not apply to you, but sometimes it’s better to spend those minutes with family and friends, instead of your computer and your credit score. 🙂