Credit is the holy grail of your financial life in many respects. Just try buying a house or car without good credit and you’ll immediately understand what I mean.
Good credit can open doors and save you BIG bucks over your lifetime. Bad credit can just as quickly slam the door shut to the best offers out there in the market (think of all those car commercials for 0% financing reserved only for the best credit deserving customers).
The costs are not measured not just in terms of higher payments, but also lost opportunities for savings and investing that you might have had if you didn’t have such high debt payments to make.
Monitoring and being responsible for your own credit should be the foundation for a healthy financial future.
Start with pulling your credit report from all three credit bureaus – Experian, Equifaxand TransUnion. Everyone is entitled to get a FREE copy of their report once a year from EACH of the credit bureaus. The best site and the only one sanctioned by the Federal government is www.annualcreditreport.com .
Knowing your FICO credit score is important also, but there will be an up charge for this information. If you do pay the extra cost to learn your score, understand that each agency has their own scoring mechanism and they most likely will be different. To make matters worse the consumer score is not the same as the score that your creditors look at, but this will at least give you a general idea.
Your credit file should be checked at least once per year, but a better plan is several times as year. You can still get the reports for free by rotating among the three credit bureaus and using a different one every four months. This way you stay on top of things on a timelier basis so that if an error, or worse an identity theft occurs, you can get on it quickly to resolve the situation before it costs you more time and money.
Make sure to go over your credit report with a fine tooth comb and dispute every line item that has incorrect information. Even something as simple as an incorrect address could factor into your scoring if it shows an inconsistent living pattern.
Bottom line – build a better financial future by being mindful of your credit matters and monitoring your credit files to build a solid credit foundation.
By: LisaC.Decker, CDFA™