As soon as I went away to college, I started the tradition of getting my annual physical check-up. It started as a necessity since I played a varsity sport in college, but it continued because I saw the value of knowing I’m physically healthy. As I became more financially savvy I got to thinking, why should my financial health be any different? Every year I should be checking my financial health as well, in particular my credit health.
So I’ve started to give myself an “annual credit report check-up”. You can do this too by simply requesting and reviewing your credit report. The end of the year/New Year’s serves as a great reminder to request your report.
Each year you are guaranteed a free credit report from each of the three credit bureaus (Experian, TransUnion and Equifax). Reviewing your credit report will help ensure your credit is in good health. But what should you look for on your credit report and how do you report discrepancies? Reading and understanding your credit report can be a little daunting at times, but here are a few quick tips.
What to look for on your credit report:
- Signs of identity theft – Are there any lenders/loans on their that look unfamiliar? All loans and lenders listed should look familiar. School loans, car loans and mortgages shouldn’t be a surprise.
- Misreported payment history – Check the recent payment history. Ensure that payment history was accurately captured. One report of late or missed payment could negatively impact your credit score.
- Falsely attributed negative items – Look at any items that are negatively impacting your credit such as collections. Make sure that any negative accounts are in fact yours.
- High credit card balances – Be on the lookout for high credit card utilization (CCU) ratios. Reviewing your credit card balances can help you spot any high CCU ratios which could negatively impact your credit. Try to keep a lower ratio.
What to do if you find the following on your credit report:
- Signs of identity theft – Report any unfamiliar loans to one of the credit bureaus. After reporting any discrepancies to one of the credit bureaus be sure to visit www.consumer.gov/idtheft for information on remedying the effects of identity theft. Also be sure to place a “fraud alert” on your report to let potential creditors know that you may be a victim of identity theft. Contact the bureaus by phone or online: Equifax at 1-877-576-5734 or www.equifax.com; Experian at 1-888-397-3742 or www.experian.com and TransUnion at 1-800-680-7289 or www.transunion.com.
- Misreported Payment history – Contact any of the three credit bureaus. If the discrepancy exists on only one, be sure to contact that bureau directly. If the discrepancy exists on all three it is the responsibility for the initial bureau you contact to notify the other two. However, it is never a bad idea to reach out to all three. After filing a dispute the credit bureau will investigate your dispute within 30 days.
- Falsely attributed negative items – Much like incorrect payment history, contact a credit bureau. Check back with the bureau to ensure that the false information was removed from your report.
- High credit card balances – That ladies and gentlemen is in your hands. Try very hard to scale back the use your credit card(s), or consider a debt consolidation. Overspending has a spiraling effect that is very hard to recover from.
Get your free annual credit report through one of the three credit bureaus at www.AnnualCreditReport.com. Learn more about your credit score and credit though several of our other blogs. Simply search “credit score” or “credit” in the airbanking blog search bar.