Photograph Credit: Microsoft Images
Do you have your credit report? Have you had a chance to review it? If so, do you know for what you are looking?
Each of the three credit bureaus has a slightly different format, but the information is the same. When I read through my credit report, I am looking for the following:
1. My name is correct. Suze Orman recommends in her Protection Portfolio using your full name, including spelling out your middle name, on all documentation to prevent identity theft and confusion.
2. The payment history legend. These symbols will let me know how the bureau is reporting my payment history.
3. Accurate credit accounts. I look at each account and identify the creditor and the type of credit (i.e. revolving, auto, installment, mortgage, etc.). If any of the information is incorrect, I will mark it for ease in locating it later.
4. Accurate reporting of credit limits and balances. I make sure what is listed matches my own records. If not, then mark it for later.
5. Correct Status and Comments. If the account is closed, then I am looking under the comment section for “account closed at consumer’s request.” I make sure this comment is on each of my closed accounts. I never want a creditor to assume that the account was closed by the lender.
TIP: Closed accounts report negatively on your credit due to lowering your overall credit limit available, the overall time you have accounts in good standing, and usually your credit to debt ratio (meaning you have less available credit when you close that account).
Though the credit agencies see a closed account as a negative, I still close accounts that Paul and I deem necessary for our financial future. For example, our Master Card with an $11,000 credit limit was going to be charged an annual fee of $75 per year. Paul and I decided to opt out of the new agreement, and closed our account at the consumer’s request.
Our debt to credit ratio was affected, but our credit score only dropped one point. This drop was worth the savings in our pocket.
6. Up-to-date information on payment history. I want to be sure that all accounts are reported as current. If you were late on a payment, be sure it was reported accurately. If you see a problem, then flag it for later.
7. Browse the list of companies that have requested my credit history. If I don’t recognize a company, then flag it for later.
8. Check inquiries that affect your credit score. Be sure you gave approval to have your credit checked. If not, then mark it.
9. Look for inaccurate reporting of your personal information. Mark anything that is incorrect, especially addresses.
Did you find any discrepancies? I remember all the errors I found the first time I pulled our credit reports. I was busy for weeks getting all the errors investigated and corrected. If you marked the errors, then the next step is disputing those errors with the credit bureau. I will help you dispute the errors next week.