Monitoring Your Credit

As our world becomes more and more digital, it is important to keep an eye on your personal credit report. Your credit report and score has a major impact on your financial life and can either save or cost you thousands of dollars over your lifetime.

In creating a plan to monitor your credit, you can feel confident that your identity is first and foremost safe, and secondly you are receiving the best rates possible when applying for credit (mortgages, auto loans, personal loans, etc.).

Check Your Credit Report

Every year, you are allowed to view one free report from each of the three credit reporting bureaus. You can go about this in a few different ways, either requesting and viewing all three reports once per year, or spreading each report out to view throughout the year. One way to go about this would be to request one report on New Year’s Day, one on Memorial Day, and one on Labor Day, so you keep a consistent eye on your credit.

You may request a free report from each credit bureau (Equifax, Experian, and TransUnion) at www.annualcreditreport.com. Please note, this is the ONLY website you can obtain a free report from. Other websites may offer a free report, but will require you entering your credit card information and may later charge you in the months to come. AnnualCreditReport.com is a website authorized by Federal law.

Check For Accuracy

Now that you have your free credit report, it is critical that you check for accuracy. On the report you will see a history of your credit, from opened or closed credit cards, to your mortgage, and more.

In seeing the full history that has been reported, you need to look through and see if every detail is accurate. Did you close a credit card recently or pay off a debt? Make sure that this has been reported accurately on your report. 

If you see any inaccurate information, you will need to contact the reporting bureau to have it corrected. Again, having an accurate credit report will help the next time you apply for credit.

Check Your Score

One great addition to most financial institutions within the past few years has been easy online access to your FICO Score. This score can most likely been found after logging into your bank account or credit card account. By seeing your FICO score on a regular basis, you will be able to see if there are any major swings in your credit that you aren’t anticipating.

Your FICO score is a ranking system for the quality of your personal credit. Based on this score, your bank or financial institution will offer you varying rates of interest for your next loan. The higher your score, the lower rate of interest you most likely will have to pay.

A few easy ways to improve your credit score are paying down your debts quickly, and never missing a monthly debt payment. Any missed payments will have a negative effect on your score.

Security Freeze

Do you have concerns of your identity being stolen or credit card fraud? The easiest way to combat this is to put a security freeze on your credit. According to AnnualCreditReport.com, a security freeze is “a step you take to prevent credit, loans and services from being opened in your name without your permission.” A security freeze will need to be made at each of the three credit reporting bureaus and may come with a service fee.

With a security freeze on, you will then need to put in a request to “unfreeze” before you next apply for credit in order to obtain said credit. This is an extra step to take when you apply for a mortgage or new credit card, but is a relatively simple way to make sure credit lines aren’t opened without your knowledge.

Going Forward

With this information, you are well equipped to be able to monitor your credit throughout the year, with only minimal effort. Like I said at the top, with an accurate credit report, you will know that your identity is safe (not stolen) and accurate. This will ultimately help prevent both headaches and lost dollars in the future. 

 

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