Top Tips To Keep Your Credit Score Aloft
You’ve done all the right things. You’ve made your payments on time for all your obligations, your balances are low on revolving accounts, you’ve diversified your credit, limited your applications for new credit, and kept old unsecured debt accounts open. As a result, your credit score is in a solid place. The question now is how to keep it there.
While sticking to the fundamentals is the most crucial part of keeping your credit score high, there are a few external and internal factors to watch out for. Once you’ve got the basics down, the main priorities are to keep an eye on the details and look out for the unexpected.
Tips For Protecting Your Credit
Utilize Credit Monitoring
There are several different sources for credit monitoring, and you can likely find a service that’ll let you track your score for free. For instance, you can access your credit reports for free once a year by visiting annualcreditreport.com or calling 877.322.8228.
The idea isn’t to obsess over your score, though. Once you’ve built up your score, you’ll want to monitor your report for unexpected information – such as a reporting error or someone else’s file being confused for yours.
These events can impact your score, so if you get an update from your credit monitoring service, it’s crucial to review your reports immediately.
If you’ve found an error on your report, you’ll need to dispute it. When you dispute information in your credit reports, you’re essentially requiring the company reporting it to the bureaus to prove that the data they’re showing for you is accurate and verifiable. If there’s an error, it must be corrected.
You can complete disputes for each of the three major credit bureaus: Equifax®, Experian™, and TransUnion®.
In the event your credit score is compromised due to fraud or identity theft, be sure to file credit disputes as soon as possible. It’s also a good idea to:
- Check all your accounts for evidence of fraud
- Contact all companies you have accounts with to let them know
- File a report with your local police about the crime
- Place a fraud alert with each of the three credit bureaus listed above
- Consider putting a freeze on your files at the credit bureau websites, creating a barrier for anyone trying to open new accounts using your information
- Run a virus scan on your computers
- File a complaint with the Federal Trade Commission at FTC.gov
- If you have identity theft insurance, file a claim
- Change all account passwords
You work hard for your money. We want to help protect it by sharing tips to help recognize scams, deter fraudsters, and take appropriate action if you fall victim.
Build Your Emergency Savings
Talking about savings might seem strange, given that we’re discussing credit reports and scores. However, on-time payment history is the largest component of your score, so it’s smart to think ahead. If a significant financial challenge were to come your way, would you still be able to keep up on all your obligations? Having six months’ worth of income in an emergency savings can help you keep your payment history rock solid no matter what life throws at you.
It’s easy to get sucked into the quest to see your credit score reach the 800-level. And once it’s there, you may want to squeeze out a few more points, but the reality is that you’re not changing anything. The cutoff for where lenders typically start handing out their best deals is around 750-780.
If you become too worried with achieving the highest possible score, you may do more harm than good. For example, if you refuse to use one of your older credit cards because you want to keep your usage percentage low, the credit card issuer may close the account due to inactivity, potentially hurting your score by lowering the average age of your open accounts.
If you’ve done the work to elevate your score, it’s time to relax and enjoy the fruits of your labor: the possibility of better loan rates, more credit opportunities, cheaper auto insurance rates, and other benefits that come with a healthy credit score.
Credit is factored into many decisions, including loan approvals, housing applications, insurance rates, and employment opportunities. To obtain the most favorable outcomes, it’s important to understand the basics of credit scores and credit reports.