The basic information you should know about credit reports is that there are three agencies that maintain credit reporting and they are named Equifax, Experian and Transunion. You can check on what each of these companies has in their file at any given time. In addition to a lot of detail about your credit history as we just discussed, your credit “health” will be represented in the form of a number of a “score”. That score will run between 300 and 850. The higher your credit score, the better you will be received by credit organizations who are deciding whether to extend you a loan.
Once you have this information, you can take action to improve how you stand on your credit history. First of all, review the credit detail in depth. You may find accounts still open that you have not used for years. Close those accounts. If you have a credit account that is not being used, it is of not value to you, it only runs down your credit score and there is always a danger someone will use it.
But the next step is to start being “credit smart” in how you use credit to help see that credit score go up over the next year. The steps to do that are….
- Always pay your bills on time. Late payments are reported to the credit bureaus and it runs your score down.
- Make more than the minimum payments. If you only pay the minimum on each credit card you owe, that will get noticed by the credit tracking software and make your credit score go down.
- Cut down on the amount of times your credit score is checked. Excessive inquiries into your score indicate that you are looking at getting more credit and that hurts your score.
- Close unneeded credit accounts.
- Start closing some of your credit card accounts once you pay them off.
- Don’t take out any new accounts.
Don’t let yourself get excited by the virtual nonstop advertising about your credit history. You do not need to know this information every day. But check it a couple times a year, no sooner than once every three months to keep tabs on what is going on with your credit history. It’s the responsible thing to do and you can just change the channel on those noisy commercials too.
