Understanding credit, your credit score, and credit management can seem confusing for many folks. Here I have simplified it by providing 4 simple steps toward better credit management.
Step 1: Know exactly what you are dealing with
The first step towards better credit management is to see a clear picture of your credit profile. Order your credit reports, credit scores and debt analysis online to get a comprehensive current status. Check that the data from TransUnion, Equifax and Experian matches up. Look out for:
• Incorrect mailing addresses
• Inaccurate Social Security Numbers
• Former employers
• Indicators of identity theft
• Errors in your credit accounts
• Inquiries that you don’t recognize
Step 2: Confirm it’s accuracy
Contact your creditors or dispute via the credit reporting companies asking them to correct credit report inaccuracies. The credit companies generally have 30 days to investigate your claim and make appropriate corrections. At TransUnion, you can dispute online, right now – it’s fast and easy.
Step 3: Identify problem areas
Look for troublesome areas on your credit report and plan how you can better manage those accounts and behaviors for credit improvement. If it’s tough for you to pay your bills on time, sign up for an automated payment service. If you carry balances of more than 35% of your available limit on any credit cards, create a payment plan to reduce those amounts. Set goals for credit management and celebrate reaching milestones.
Step 4: Follow up
Check your credit again 30-60 days after you pay off debts to see if your reports reflect credit improvement. If you feel you need to explain anything, add a consumer statement to your credit report.
And make sure you follow up at least once a year to check and confirm your report’s accuracy.