Like most, this time of year is all about assessing, setting goals, and planning for the year ahead. What better way to set yourself up for success than to check your credit report for accuracy! There are three national Credit Bureaus –Experian, Equifax, and TransUnion.
When to check credit report?
In previous years, you were limited to one free credit report per year from each. Due to the pandemic, they recently expanded it to one free credit report weekly through the end of 2022. Yes, you read that right! It jumped from annually to weekly. So, there’s no excuse not to request your credit report and continue monitoring it throughout the year.
Where do I get my report?
Luckily you only have to go to one website to do so- www.AnnualCreditReport.com or call 1-877-322-8228 to request a report. This is the only authorized site to get your free report from but there are definitely other sites claiming to provide the reports. We recommend avoiding companies offering a “free report”. Usually, it’s a marketing tactic to sign you up for a credit monitoring service or to sell your personal information to a third party.
Why should I pull my report?
Simply checking your credit score whether it be on an annual basis or more regularly, keeps it top of mind and protects you from errors and potential identity theft. As you review your report, the bureaus provide prompts so you can dispute any information that may appear inaccurate. Your credit report does not include credit scores so it’s important to also monitor your score so you can take the necessary steps to improve it. Here are a few tips if you want to boost your score:
- Automate it– Avoid missing an on-time payment by setting up automatic payments. Payment history is the biggest factor in determining your credit score. It makes up 35% of your FICO score. Not only can you improve your credit with on time payments, if you pay in full, you’ll also avoid paying high interest rates. If you haven’t created a habit of paying off credit cards monthly, you may want to create a budget to help get you on track.
- Build it – Increasing your credit limit can help your overall credit utilization, the ratio of credit being used versus credit available, which contributes to 30% of your credit score. Expanding your credit limit with an existing card or adding a new card are two ways you can boost your credit score over time. Keeping your overall utilization ratio below 30% is ideal. This strategy only works though if you are disciplined and don’t increase your spending with the higher credit limits available. Build up your credit limit, just don’t use it!
- Keep it – It’s tempting to want to close those credit cards that you don’t use anymore but its likely more beneficial to keep them open and active. They are actually playing a role in your overall credit score by contributing to your utilization ratio and giving you a longer track record of payment history. If you have any recurring monthly expenses, you could set them up to be paid automatically from a card that you don’t frequently use so it doesn’t become inactive.
- Monitor it – Regularly reviewing your credit report and credit score can ensure its accuracy. Errors can and do happen! Keeping an eye on your report and disputing errors, can keep them from negatively impacting your credit.
Implementing these habits can help you build and maintain your credit score over time. Be sure to contact us if you need assistance requesting your credit report. Our team of Austin finanical advisors would be happy to review your report with you!