Your financial health rests on your past activities with lenders and creditors. Whenever you apply for a credit card, a place to rent or a loan, your credit report is accessed by the entity and assessed for approval of your application. If you’re like many people in America, you have blemishes on your credit report that keep you from obtaining the better things in life, such as a new car, new home or even a personal loan. Even employers are starting to look at credit scores as part of their application process. Those who have good credit scores are
believed to be more trustworthy in other aspects of their life. In order to keep an eye on your score, you can obtain a free annual credit report. Not only should you request your credit report each year to check on your credit rating, but you should also look at the information that is on there to see if it is accurate. Identity theft happens to millions of people around the world, so make sure that you don’t become a victim by watching the items that show up on your credit report.
Identity Theft Can Happen to Anyone
One of the top reasons why you should monitor your credit report is to ensure that someone else hasn’t been using your identity to obtain credit. Even the people who feel they safeguard their personal information can become a victim. There are many ways that someone could steal your identity – the top being via the Internet. It’s important that you only shop at Web sites that are trusted and have security measures taken to protect your credit card information. Here is a list of ways to protect yourself from identity theft:
• Never leave your personal or financial information lying around your home. You’d be surprised at how many acts of identity theft are carried out by relatives and friends. This includes checkbooks, financial statements, billing information and social security number.
• Shred important documents like bank and credit card statements. You don’t need the machine to do this, simply rip them up by hand. If you choose to buy one, purchase a crosscut shredder to do a better job. It’s also a good idea to mail checks using the post office box, rather than your home mailbox.
• Opt to receive your bank statements via Internet. Most financial institutions allow members to opt for electronic statements, versus paper statements, which will help to protect your information. Just make sure no one has your passwords to your online accounts.
• Sign up for credit report alerts and copies. There are companies out there that offer free access to your FICO scores and credit report.
• Avoid giving out your social security number if possible. A lot of offices that you do business with require your social security number, including hospitals, schools and financial institutions and some may have untrustworthy employees who are stealing people’s information.
• Always have a password on your computer and safeguard all passwords to online accounts. When choosing your passwords, make sure that they are hard to guess but easy for you to remember. The same goes for your security questions, make them hard for people to guess.
By monitoring your credit report regularly, you’ll be able to keep your debt managed. When you review your annual credit report, you’ll be able to see what inquiries were made and what lines of credit were established. If you see anything fishy, you can dispute them and potentially have them removed from your report. There are three major credit reporting agencies that you will have to obtain your credit scores from – Experian, TransUnion and Equifax.
Knowing what debts are on your credit report will enable you to make plans to pay them off, so that you can potentially get out of debt. Financial freedom will give you peace of mind and it will raise your credit scores. If you are suffering from a large amount of debt, you can manage it by viewing your credit report and writing down all of the outstanding balances that you have. Some people use the snowball method, which is when you start with the smallest debt and work your way to paying off the biggest debt. This method has worked for millions of people who are looking to manage their debt.
If you don’t want to manage your debt on your own, you can enlist the help of a debt management company who will request to see your credit report. Then they will offer you counseling or debt consolidation services that will help you to get out of debt quicker.
Paying for College
If you are looking to pay off your school loans, you will need to take control of your debts. This can be done by requesting an annual credit report and looking over what debts you have. You can make arrangements with your college to pay off your debt. In most cases, you are granted a grace period that will allow you to find work after graduating. Then monthly payments are set up, so that you can pay off your loan.
Getting into school can also be easier when you have good credit scores. You will be able to take out a school loan to pay for your education. This is the next option if you don’t qualify for financial aid and free grants. School debt accounts for millions of Americans’ debt. Secondary education can get very expensive, so you will need to sort out your finances to ensure that you’ll be able to pay off your debt. A lot of graduates are unable to pay off their school debt, which keeps growing and growing each year.
Purchasing a New House
The decision to buy a new home is something that every American makes at some point in time. However, not everyone is qualified to do so. This is especially so for those who want to buy a dream home that is out of their financial ability. When it comes time to purchase a house, you will need to ensure that your credit report is in good standing. Otherwise, you are likely to get your application denied by lenders.
In order to buy a new home, you will need to prove that you are creditworthy. Unless you are buying a house in cash, you will have to apply for a mortgage loan from a financial institution. Depending on the price of your home and the amount you have to borrow after the down deposit, will determine what credit rating the lender will be looking for. The higher your credit score, the more you’re able to borrow. Your household financial situation will also play a role in your ability to obtain a mortgage loan. If the net income of your home meets the requirements of the lender, you are more likely to get approved. But if your credit history shows that you don’t pay bills on time, especially utility bills, rent and other home related expenses, then you’re very likely to get turned down.
Buying a New Car
There comes a time when you want to drive a modern car that is up-to-date, but in order to do this, you’re either going to have to save up tens of thousands of dollars or obtain an auto loan. When you go to a car dealership, you will have to fill out an application that will approve you for financing. Some dealers offer in-house financing, while others require you to apply for a loan from another financial institution. If you’re able to choose which bank to apply for a loan from, you can try doing so with a bank you already have a checking account with. Otherwise, you can fill out applications with multiple lenders to see who will approve you. This is a big reason why you should keep an eye on your credit score. Knowing that you have a good or excellent credit rating will increase your chances of getting approved for an auto loan.
Start Your Own Business
Other than needing credit for consumer purposes, you may want to get a business line of credit that will allow you to start your own business. In order to do this, you will need to have a solid business plan and a good credit history. If your credit score doesn’t sit well with lenders, then your dreams of owning your own company will quickly go down the drain. By monitoring your credit, you will be able to improve your credit rating. You can also apply for a business loan with a co-signer who will act as the co-owner of your company.
Repairing Your Blemished Credit
Join the millions of other Americans in their attempt to clean up their credit reports and raise their credit scores. Having bad credit can make your life more difficult, especially when you are trying to move forward after a bad financial situation. A divorce, filing for bankruptcy and other situations can leave your credit report looking less then suitable to lenders and creditors. If you are ready to fix up your credit, you will need to take certain steps to make it happen. Staying motivated during the process is very important. A lot of people start off well, paying off their debts, but then slack off and fall right back into their old spending habits.
Here are a couple of steps that you can make right now to help repair your credit report:
• Request your annual credit report: Knowing what’s in your credit history will give you a better idea of how much work is actually needed to clear up your credit report. You should be looking for any errors on the report and calculating how much you owe and to what entities.
• Make payments on time: You can set up payment reminders, so that you remember to make all of your bill payments on time. Some financial institutions allow you to set up payment reminders, which can be sent to your email address or via text message. Automatic payments can also be set up, so that you never miss a payment. This will only focus on paying the minimum balances, which isn’t eliminating the debt, so try to make larger payments each month to help get rid of the debt altogether. When you are paying off your credit card debts, make sure to focus on the ones with the highest interest rates first.
• Create better spending habits: Eliminating your debts is more than just paying them off. It’s also about avoiding creating more. With good spending habits, you can reduce your debts faster. For instance, you can stop using your credit cards and instead use cash as a form of payment.
Once a debt has gone to a collection’s agency, even after you pay it off, it will remain on your credit report for seven years. This is why it’s very important that you quickly become current on any past due bills and make your payments on time.
There are many reasons why consumers and business owners should monitor their credit reports. Not only is it protecting them from identity theft, but it will enable them to stay in good credit standing. You never know what the future may bring – you may want to upgrade to a bigger home for a bigger family, purchase your dream car or refinance your home, so that you can go on the vacation that you’ve been wanting for years. Today, monitoring your credit score is easier than ever, thanks to the various companies that offer services that send you alerts of suspicious activities and keep you updated when your credit score rises or falls. You can also count on your free annual credit report from the IRS as a way to keep an eye on things. To make your financial life easier – whether it’s to get out of debt or stay out of debt – you should take special care to monitor your reports from all three credit reporting agencies.
I kept seeing ads for different credit monitoring services, but some like they weren’t necessarily something I wanted to sign up for. This site gave me some good facts and details about the various services that are available which helped me pick one that was reputable and reasonably priced.
– Nicasio L Oceanside, CA