When was the last time you reviewed your credit report? If it’s been a while, then it’s time to review this important and highly sensitive information.
Why? It’s essential to track – and understand all the information in your report, regardless of your life stage. The information contained in your report can also impact all aspects of life, such as your ability to get a loan or credit card, buy a car or home, rent an apartment, or even get hired for the job you want.
There are two additional reasons for reviewing your credit report regularly: to ensure your report is accurate and protect yourself from fraud or identity theft.
Understanding your score:
- Scores below 600 are thought to be weak; scores above 720 are strong.
- A stronger score can help you to obtain a lower loan rate, more competitive pricing on insurance, as well as other financial advantages.
- Not surprising, mistakes can crop up on even the most diligent person’s credit report, and these errors usually negatively impact your score.
Bottom line? A low score can be costly in terms of loan rates, getting a job or making a major purchase.
Tips to improve your score:
- Make it a priority to pay your bills on time, all the time. If this is difficult for you, find ways to keep on track, such as calendar reminders, alerts or automatic payments. Making payments on time can help your score; late payments have the opposite effect and hurt your score.
- Don’t tap into all your available sources of credit – a good goal is to keep 50% of your credit lines open.
- Start your credit history early, but with lenders you trust – the longer your credit history, the greater your opportunity to build a stronger score.
- Don’t relentlessly apply for credit. Applying too frequently or submitting too many applications can lower your score.
- Put your emphasis on attaining “good debt.” This can include more prudent loans, for example, share secured loans, auto loans, and mortgages, from your credit union. Also, avoid payday lenders at all costs.
How to get a copy of your credit report:
The three major consumer-reporting agencies in the U.S. are Experian, Trans Union and Equifax. All can provide you with a free report annually.
For a nominal fee, you can also get a report through GreenPath Financial Wellness, First United CU’s financial education and counseling partner. A GreenPath counselor is also available to review the report with you. They will help you understand how to read the report, show you how to dispute inaccurate information and discuss credit scoring.
Take advantage of the GreenPath Financial Wellness program – and spring clean your credit. To learn more, call us at 616.532.9067.
Source: Our trusted partner, GreenPath Financial Wellness