While spring is known for inspiring a hefty “to-do” list in many a home, it’s also prime time to get your financial house in order. If you haven’t done a thorough inspection of your credit in a while, dust off your credit reports and take a fresh look at your credit scores.
Your credit file is only as accurate as the information your creditors provide to TransUnion®, Equifax® and Experian®. You might be surprised by what’s been swept under the rug that can tarnish your scores.
Here’s a spring “credit-do” list to help you get started:
- Weed out errors on your credit reports. Errors that grow undetected and uncorrected can strangle your credit scores and limit your financial options for years. We’ve listed a few of the more common culprits.
- Accounts that are incorrectly reported as late or delinquent.
- Closed accounts reported as open.
- Accounts with an incorrect current balance or incorrect credit limit.
- Unauthorized accounts due to identity theft.
- Less common, and harder to correct, is a “mixed file” error in which another person’s credit information ends up on your credit reports, or vice versa, because your names are an exact match, or very similar.
- Prune negative information that should have fallen off your credit reports. By law, credit bureaus are only allowed to list negative items for a certain amount of time.
- Collections, paid tax liens and Chapter 13 bankruptcies can only remain on your reports for 7 years.
- Chapter 7 bankruptcies and unpaid tax liens can stay on your reports for 10 years.
- File a dispute to correct errors, outdated information or fraud that can damage your scores.
- All three credit bureaus are required by law to respond to your dispute within 30 days.
- If you request it, each bureau must send a notice of correction to those who received your report in the past six months – or during the past two years for employment purposes.
- Clean up your own messes. If your scores have dropped due to your own actions (or inaction), take steps to wipe away the negative impact.
- If you have past due accounts, make it top priority to get caught up, or contact creditors for assistance.
- If you have an account in collections, negotiate with collectors to reach a reduced payment agreement to mark the account as paid-in-full.
- If you owe a lot on several accounts, re-think your budget to reduce your debt wherever possible.
- Build on your successes. If you’ve seen a vast improvement in your scores, put them to work for you.
- Check the finance charges you pay on your credit cards – then call to request a lower interest rate. If you have been a responsible card-holder who always pays on time, you might just get it!
- Higher credit scores can also help you get lower auto insurance premiums.
- Actively monitor your credit and personal information. Checking your own credit does NOT hurt your scores – and can help you catch errors or suspicious activity, early, that may pose a threat.
- Review your credit reports for changes when you sit down to pay your bills each month.
- Update your credit scores once-a-month to see where you stand with all 3 credit bureaus.
- If you’re already signed up for monitoring services, pay attention to every alert you receive.
Use springtime as your springboard to do a deep cleaning of your credit reports – and start monitoring for changes to keep a shine on your scores.