It’s Springtime! Not only is it a good time to clean out the garage and reorganize the closets,  it’s a good time to make sure your credit report is neat and tidy as well. I want to give you some tips on how to get started… and what to do if we find a big mess.

Many of us don’t think about checking our credit report until we’re considering making a big purchase, and that can be a big mistake

  • Your credit report – and the scores it helps create –  can affect everything from your ability to get a car loan, to getting a mortgage to renting an apartment.

How often should we be checking your credit?

  • A recent study revealed that nearly two thirds of adults haven’t looked at their credit reports in more than a year. (Source)

  • Why? Some people think their report is in good shape and they don’t need to look at it, while others think it’s in terrible shape and feel that checking it won’t help them.

  • You should look at your credit report at least once a year to make sure it’s accurate.

Below are the tips on how to get started

Get a Copy

  • Federal law allows you one free credit report each year from each of the 3 credit bureaus: Experian, Equifax, and TransUnion.

Check For Accuracy

  • Make sure all of your information is correct. Start with the basics, like your Social Security number, address, birthdate, etc.

  • Make sure you can recognize and identify each account.

  • Any inaccuracies you find can be reported in writing to the credit bureau that issued the report. They have 30 days to investigate your claim.

  • Follow up later and make sure the error has been corrected

Look For Red Flags

  • An account with a much higher balance than you carry might indicate that your identity has been stolen.

  • Look through the inquiry section and make sure there are no new loan or credit card applications that you don’t recognize.

  • If you do discover fraudulent items, call the credit bureau to dispute the info.

  • You can also ask them to add a fraud alert to your report, so you can be notified if new information is added to your account.

Remove Negative Information

  • After 7 years, all negative information can be removed from your credit report. A bankruptcy, however, is required to stay on your report for 10 years.

  • You can also request that negative information be removed directly from the lender. Be prepared to show a bill with a “zero” balance or other proof that the debt has been paid in full.

Be Patient

  • Good behavior is one of the best ways to earn a good credit report.

  • Make good on your missed payments, keep your accounts up to date and be patient. Over time, the bad marks will fall off and be replaced by a more positive history.

Want to clean up some of your troubled areas?

  • Some of the easiest ways to improve your score is to pay your bills on time, pay off your debt and be responsible with your credit cards.

  • Paying your bills on time accounts for 35% of your score. (Source)

  • Keeping your balances low will keep your “Utilization Rate” down. It measures how close you are to maxing out your cards and counts for about 30 – 35% of your score.

  • Don’t be tempted to close unused or rarely used accounts. They can still have value. Older accounts – even accounts that are closed – provide lenders with longer views of your history.