Spring is in the air. It’s beautiful out, so obviously the first thing you want to do is step outside think about your credit!
Right?
Maybe not, but it’s a great time to do a quick spring cleaning.
You’re already spring cleaning “everything else.” Why not clean up the thing you buy “everything else” with? I’m joking, of course. I know you don’t buy everything with credit cards.
Or at least, if you do, you pay them off every month…don’t you? Sure you do!
Here are some simple and, most importantly, free steps to cleaning up your credit…
1. Pull Your Free Credit Report (Only One!)
You may already know that the only “federally authorized” source in the United States to provide you with a free credit report is AnnualCreditReport.com.
Most people think you get one free report yearly, but you actually get three.
You can pull one from each of the three nationwide consumer reporting agencies:
Pull your first report of the year from any of these, but only pull one report. Save the other two reports to check on updates to your credit later in the year. Space each of them out over several months to check for updated accuracy and any new discrepancies.
Once you have your report…
2. Review Your Credit Report
Reviewing your report is fairly self-explanatory and easy to do.
You are looking at three main areas:
1. Potentially Negative Items
This should be the very first section. These are basically any discrepancies, which are items that have been turned over to a collections agency. They usually stay on your credit for up to seven years after the initial missed payment.
2. Accounts in Good Standing
This section lists all of the debt reported to the consumer agencies. These accounts should be in good standing, but it’s important to look for inactive accounts and accounts that you don’t recognize. More on this later.
3. Requests for Your Credit History
There will be two sections here.
The first is the inquiries shared with others. These are inquiries for things like applying for a new card or loan. When you hear about credit inquiries that negatively affect you, that would be this section.
The next section is the inquiries that are only shared with you. These are for minor things like a credit monitoring service. These inquiries DO NOT affect your score.
3. Make Corrections
If you have negative items, look at each one to determine whether it is supposed to be there.
If it’s inaccurate, simply call the company that reported the charge first. If you can work it out with them, great! If not, you will need to contact the actual credit reporting agency. Here are the numbers.
- Transunion: 800-916-8800
- Experian: 888-397-3742
- Equifax: 866-640-2273
Even if it’s accurate, you may still be able to have it removed. It never hurts to call and try.
Look for unused accounts as well. If you have old credit cards that you haven’t used in years, consider closing them or using them.
It does help you to have a longer history on accounts, but if you already use several cards and don’t need one, close it. By leaving it open and not monitoring the account, you risk someone else stealing your information and using the account.
Now that you have made the proper corrections…
4. Get Your Free Credit Score
You have a few options for getting your credit score for free.
Try one of these sites:
They both offer a free credit score and free credit monitoring, but I personally think Credit Sesame is a little better.
I like that they offer free identity theft protection.
Plus, the last time I had a change to my credit, Credit Sesame actually sent me an alert email three days earlier than Credit Karma. Three days could mean a lot if there had actually been some sort of fraud.
5. Stay Organized
You have pulled, reviewed, and corrected your credit report…to the best of your ability. All you have to do now is stay organized.
Pull another one of your 3 free credit reports in a few months to see if anything has changed (for better or worse).
Always keep at least one copy of your credit report for reference.
Also, keep an eye on your credit score. Credit Sesame will provide you with a new score once per month (or more in their paid service).
Take Action
That’s it! Get to it.
These steps shouldn’t take long, especially since you can now view your credit report and score instantly online.
No more waiting on snail mail.
It really doesn’t take long to do this if you do it every year.
What’s next? Learn to improve your credit or pay off your credit card debt.