Published by Debra Taylor, CPA/PFS, CDFA, JD | July 11, 2016
When you were in school, it’s possible your GPA was the most important number you maintained. However, a number more important to maintain is your credit score. Why? Because your credit score determines so much of what you can do (financially) now and in the future. A good credit score will allow you to obtain financing for a home, a car, and other large purchases, while bad credit scores make it difficult to do many of these things and more (such as obtaining certain jobs). The good news is that there are two main ways you can monitor your score to make sure you keep it on the high end of the scale (300 – 800). And they won’t cost you a penny. I personally take advantage of the following resources to stay on top of my own score.
Free FICO Scores – This is New!
I just became aware that you can access your FICO score for free through your credit card company. Since FICO scores are already resident in credit card company’s customer databases, the new FICO Score Open Access program enables credit card companies to display scores to their customers on their monthly statements or through their online accounts. Credit card companies are increasingly taking advantage of this new capability as they realize that it is opening the door to better customer relationships. Currently, American Express, Bank of America, Barclaycard, and Citibank all provide free FICO score access either on their statements or via online accounts. Discover provides FICO scores right on the first page of their monthly statements as well as online. Chase is also providing the FICO score for some (but not all) of its credit cards, and many other credit card companies are releasing similar access to FICO scores.
Monitor your credit card statements or online accounts on a monthly basis to see what movement is occurring in your FICO score. If you see any unusual or significant drops in your score, it may be time to request your credit report and take a good look at what’s on there.
Free Annual Credit Reports
Many people don’t realize that, legally, you are entitled to a free annual credit report from all three credit agencies (Experian, Equifax, and TransUnion). There are websites that offer access to free reports and scores, such as www.credit.com, www.creditkarma.com, and www.creditsesame.com. Alternatively, you can do it the old fashioned way and request your credit reports by regular mail, either with a letter addressed to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281, or by filling out the Annual Credit Report Request Form available for paper submission (click here for the form).
It’s good practice to take advantage of these free reports and review your credit reports annually for any incorrect or negative information. If you find that there are any errors on your report, you can dispute them by contacting the credit bureaus and/or the company that provided the information to the credit bureau. For more detailed instructions, click here to read the Consumer Financial Protection Bureau’s instructions on how to dispute an error. You can also click here for CreditCards.com’s interactive guide on how to read and understand a credit report.
Another technique, and one that I use for myself, is to request a credit report from one agency at a time, every three to four months throughout the year. For instance, I will request my report from TransUnion in March, then from Equifax in July, and then from Experian in October or November. Although the information from each of the agencies may vary slightly, I have noticed that this helps me see what is generally being reported on a regular basis.
If you are concerned about your credit score and would like help taking the necessary steps to monitor or repair it, please contact our office and we will do what we can to assist you.