No matter what time of year it is, it’s never too late to dust off your credit reports and know exactly where you stand. Especially these days when many consumers are swimming in debt or relying on credit to make ends meet. A recent study found it is common for consumers to spot errors on their report, which can cost them a much-needed job or loan.
So what can you do to clean up your credit?
1. Order a copy of your credit report from all three credit bureaus.
Credit reporting agencies, Equifax, Experian and TransUnion, don’t share information with each other and may not report the same data.
2. Know how to spot identity theft.
Be wary of any accounts and/or inquiries on your credit report that you cannot recall or explain. Consumers should examine their address and other information listed in the report’s header since these types of errors could signal mistaken identity.
3. Dispute errors the smart way.
Dispute the mistake with each of the credit reporting agencies reporting if:
• You can not contact the filing company.
• The information reported doesn’t belong to you.
Dispute the mistake with the filing company if:
• You have documentation
that will show they made
• You’ve already contacted
the credit reporting agencies
and they have confirmed the information is “correct”
and you want to go to the source.
Always send written disputes by certified mail, return receipt requested and keep a copy for your records. Here are the addresses necessary to file a dispute with the major credit bureaus:
P.O. Box 740256
Atlanta, GA 30374-0241
P.O. Box 9556
Allen, TX 75013
P.O. Box 2000
Chester, PA 19022
4. Pay attention to which areas need work.
Figure out how to improve what is dragging down your scores. If debt is high, take a look at how you can prioritize your payments to pay off the debts with the greatest impact on your scores more quickly. If it’s your payment history, try to pay everything on time moving forward. Fortunately, most black marks will drop off your score after seven years.
5. Factor in medical debt.
Letting a bill slip through the cracks or assuming insurance will take care of it is very dangerous. If you’re making payments on the debt it can possibly still be sent to collections. Start off by getting an itemized medical bill from your provider that lists all your charges one-by-one, then check to make sure all the fees are correct. From there, you should verify whether your insurance has actually kicked in, and also request an Enrollment of Benefits form from your insurer to see how much they plan to pay for the bill versus how much you personally owe.
This article was published in Founders FCU Transaction Newsletter (April 2013).