[I]f you have heard that you get an annual credit report for free from each of the three major credit bureaus, you may wonder when you should you request them. Some people do it at the beginning of the year just like annual New Year’s resolutions. Others do it around their birthdays.
Some people even pay for a credit report when they are looking at buying a house or new car. While there are no hard and fast rules for when you should get a new report, there are a few factors that may help you decide the right time.
You Have Had Excellent Credit in the Past
If you have had no problem applying for credit in the past, you won’t need to get your report too far in advance. However, you don’t want to make the mistake of assuming that you won’t need to see it all. Even if you are confident that you have paid your bills on time, you may find inaccuracies that you have to clear up before applying for credit.
If you are not too worried about your credit history, you should still check the report at least 30 days before applying for a car loan and 60 to 90 days before applying for a home loan. If something is stated in error, you have time to fix it without messing up your plans.
If You Had Credit Problems in the Past
If you know you have had some problems with your credit in the past, you must allow more time to look at your credit reports. It is a good idea to review your reports at least six months before buying a car and a year before trying to get a home loan. Why? It gives you time to make real improvements to qualify for those loans.
You may discover that you need to do some things to improve your chances of approval:
• Have 12 months of no late payments
• Pay off collections
• Pay down credit card balances
• Open a new credit card
These actions will improve your credit but they won’t do it overnight. The more time you give yourself for improving your credit history, the higher your credit score will be when you are ready to apply for a home or auto loan.
