Your credit is like your body
You need your doctor to review your body in the form of a check up at least once a year so your health doesn’t slowly deteriorate. The same is true of your credit. You need to give it a check up but much more often than once a year. In fact you should give it a quarterly checkup. This could be January, April, July and October or at any other three-month interval you choose. At first, you may find it hard to stay with the schedule but you’ll find it only takes a few minutes to give your credit a checkup and it will eventually become such an ingrained habit you’ll hardly notice it.
The way that you give your credit a checkup is by getting your credit report. You can get your reports from all three of the credit bureaus simultaneously at the site www.annualcreditreport.com.
Go over your reports with a fine tooth comb
You need to review your reports very carefully looking for information that it’s incorrect or that doesn’t even belong to you. If you find errors, you need to dispute them and have them deleted from your report(s). To dispute an item you will need to write a letter to the credit bureau, along with supporting documents, to show that the item wasn’t yours. The bureau will then contact the company that reported the item and ask for verification. If the company cannot verify the information or just doesn’t respond within 30 days, it will be removed from your report.
If you have overdue payments
In the event you find overdue payments, you will need to make a plan to pay them as quickly as possible. It is believed that 35% of your credit score is based on how you handle credit. Overdue payments suggest you have not been handling it well and this can lower your credit score.
Find areas where you could make improvements
See if you can identify several areas where you could make improvements and set goals to achieve them during the coming quarter. For example, if you find you’ve regularly been a week or so late on a credit card payment, work to make that payment on time or even early. If you can find a couple of areas like this, write them down on a card or sticky note. Then put the card or note someplace where you would see it regularly to remind you of your goals.
Get one report each quarter
While you could get all three of your credit reports simultaneously, a popular option is to get your report from one of the three credit bureaus every three months as a way to monitor your credit year round. For example, you could order your credit report from Experian now then get your report from TransUnion in three months . Three months after that, you could request your report from Equifax and so on. Since the three credit bureaus are required by law to provide you with your credit report once a year, you have nothing to lose by doing this.
Start storing your credit reports in a binder
You’ll want to begin storing your credit reports so you will have a history of your credit and your debts. Believe me, reading credit reports isn’t much fun but it’s the best way to learn where you need to do better so that you can improve your credit score.