Unless your last name is Rockefeller it’s likely credit is a necessary evil in your arsenal of personal finance. Even if you’ve dedicated yourself to a cash only existence, credit scores can still effect your life. For instance, did you know credit scores are commonly used by Human Resources departments? If you’re up to your ears in debt, that dream job might just pass you up because of your faulty credit.
Credit Score and Credit Report: What’s the difference?
Your credit report is a list of all current and past debts, including if you have made late payments, missed payments, etc. You can get your credit report from all 3 agencies (TransUnion, Equifax, and Experian) for free at AnnualCreditReport.com. You want to make sure you have credit reports from all 3 agencies, since they differ in their reporting methods.
Why is it important to check your report?
It’s important to check your credit report for errors. You may have a name that is similar to a family member, or someone may have opened an account in your name without you knowing. Once I even found a credit line that was open on my report, even though we had requested that it be closed.
If you have any blemishes in your credit history it’s important to check to make sure they are off your report at the appropriate time. We were also once dinged for late payments, despite a glitch with the credit card company making it their fault not ours.
My recommended method is to check your credit report every 4 months, rotating agencies, that way you have a good chance of catching any mistakes pretty quickly. Since my husband and I share a lot of our debts (both names on the accounts) by running a report every 2 months on one of us I can consistently monitor our credit.
What about your credit score?
Credit reports don’t include credit scores, that magical number that the agencies use to determine your credit worthiness. The difference between under 700 and over 800 can mean thousands over the lifetime of a home loan for instance. Don’t know what’s a good score, an average score, or a bad one? Try checking out this informative post at Bargineering. So, how do you get your credit score?
There are 2 ways to obtain your credit score:
1) Apply for a loan: When you apply for a loan you are sometimes given the info about your credit score, although clearly this is not the time to figure out your score especially since it could cost you hundreds to thousands of dollars.
2) Use a website to get your credit score: There are several options that cost from free to over $30.
One site that makes it easy to get your free credit score, and sign up for credit monitoring is CreditScore.com. They offer a free trial that is outlined on the front page of their site. You can sign up for the free trial and cancel at any time. Should you choose not to cancel (or forget to!) you will be charged $14.95/month for credit monitoring. I’m sure most people don’t want to pay that much for credit report monitoring, but it does offer a few benefits.
Benefits to credit monitoring:
Most of us have a lot to do, and little time to do it. Despite organizers, computer calendar software and the ubiquitous post it note, you will likely forget to check your credit report regularly. While we were getting ready to move-remodeling, painting our old house and shopping for a new one, I completely forgot to check our credit reports and scores. We checked it originally in February, but when it came time to close on our house in July there was a ding on our reports. I mentioned it above, it was the credit card company’s fault, but we didn’t catch it in time. That meant our rate shot up about 1%, and there was nothing we could do but wait. It was removed from our report, and we did refinance, but we could have saved a ton of money and time by signing up for to receive a monthly credit report.
While it may not be something you need all the time, at time it does make sense to have someone else do the work for you, delivering your report right to your inbox.
If you can’t be trusted to cancel your free trial, and don’t want free credit monitoring I also recommend trying Credit Sesame
.
When was the last time you checked your report and score?
Brijeshsanandiya says
this is complete info about credit report
Brijeshsanandiya says
this is complete info about credit report
Jenna says
Hopefully sometime in the next couple of weeks! Looking to buy a home and interested in what my score is.
Moneyandrisk says
I highly recommend not using any credit monitoring services. Just make the effort to do it manually.
I choose to register for one of the bigger “credible” ones and it cost me thousands of dollars in fees over several years. This is due to the fact that they keep upgrading your service with an opt-out so you have to call in to get it reduced. In the meantime, it costs you during the months that it take them to accept the reduction.
I spent several years continuously trying to cancel the service and it kept getting posted back. It would have been cheaper for me to hire a personal assistant to do the paperwork in monitoring my credit.
Wow-that's just awful, Joey!
I'd love to hear how you are dealing with it-fortunately when my identity or info has been stolen, it's not cost me a dime.
I hope things work out.
Love that you have everything so organized, and I'm fascinated that your husband has a different system. Would love to hear how he handles it.
Last year I got my credit stolen and I'm am STILL trying to fix it!! The things I learned from the credit card companies and investigators are so disturbing. Over $50,000 was stolen from me - including 2 cellphone accounts opened in MY NAME. What's more alarming-they were through ATT, the company I use now!!! Why they didn't call me - is beyond me. I wouldn't wish my disaster on my worse enemy!
Joey Fortman
http://www.JoeyFortman.com
Pepperjack59 says
We also check our credit reports 6 times a year (3 for me and 3 for Hubby). In addition to an Outlook reminder to take care of it, I keep a physical reminder in my monthly tickler file-the newest report from each of the three agencies paper clipped together. Each month it's time for another report the pile moves from the file to my desk, where I have to look at it (and clutter really bothers me!) until I complete the task. After I collect my free report, I shred the old one, put everything back together, and move it to the correct place in the ticker file until the next time.
This works for me. Hubby has a different system.