You should monitor your credit regularly: monthly, every four months, or annually.
Why?
There could be a mistake, and you have a limited amount of time to report/question/correct it.
Say your credit report shows that you paid your Visa bill 15 days late in October. But you paid it on time, and you have the endorsed check to prove it.
Or the credit report shows that you have a Macy’s credit card, but you don’t.
These are mistakes that negatively affect your credit score, and the sooner you correct them, the sooner your score will go up. (Why is it important to have a high score? Check the last post.)
First of all, if you take just one thing away from today’s post, it’s this:
DO NOT GO TO WWW.FREECREDITREPORT.COM
to check your credit score. While this website provides credit monitoring services, etc. it is a PAID subscription that will charge your credit card every month, and unless you need the services it offers, please don’t waste your money. There are FREE places to get this information.
By law, the three credit bureaus are required to give you one free credit report per year. That means that between the three, you can have a free report every 4 months. Here is the website:
From there, you will select which agency you’d like to view: Equifax, Experian, and TransUnion. The website will ask you confidential questions to confirm your identity, such as your social security number, current and past addresses, and date of birth. The important thing is that they will NOT ask for a payment method. (Because they ask for such confidential information, please access this site from a secure location such as your home, not in a public place such as a coffee shop.) You will receive your report right online. Print or pdf it immediately before the website expires, then review and make sure all the information is accurate.
If something is wrong, follow the instructions for contacting that credit bureau (found on the credit report and on the website.) In this case, you should also run the reports for the other two agencies to make sure they do not have the same mistake.
Follow this process again in 4 months, or in a year.
Note: you will not get a free credit SCORE with this -- that will cost extra. However, there’s an easy way to get your credit score for free.
www.creditkarma.com
(Note: each credit bureau has a different method of calculating the score, and a different scale. They are not comparable to one another, but you can track the ups and downs of your score by mapping the score from one agency over time.
In this website, you will create an account, enter personal information to confirm your identity, and get your credit score. You can go in and run your score once a month. This website is supported by ads, and has financial offers that may help you save money. For example, Credit Karma will see that you have a mortgage at a 6.5% rate, and you have an excellent credit score which qualifies you for a much lower rate. It will give you mortgage offers from several lenders to reduce your rate. Of course you do not have to accept these offers, but 1. know that this is advertising, and 2. realize that you may be able to reduce your financial expenses, so look into it (not just from these offers, but on your own, too.)
Credit Karma has a nifty graph which shows the progress of your credit score. If you closed a credit card in January and that lowered your score, you can see exactly by how much. Investigate any significant jumps in your score.
Another reason to keep these websites in mind: when you’re looking for a rental. More often than not, landlords will run a credit check on a prospective tenant. You should make sure your credit history is accurate before your prospective landlord discovers something (that you know is wrong) that will deny you the apartment. The best applicants bring a recent copy of their credit report to the open house. Now you know where to get one for free.
PS. I run my free credit report once a year, and check my Credit Karma score once a month.
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