Because your credit score can make the difference in whether you can secure a loan, your insurance rates and sometimes even your ability to secure employment, it’s important that you request and review your credit report each year so you are up-to-date with the latest changes to your credit standing. Knowing what to look for in your credit report, as well as what to do to fix blemishes on it, can be key to improving your credit score and helping you stay out of debt.
Along with looking for late payment marks, debt to credit limit ratios and any collections activities, other items to be aware of include:
- Judgments, bankruptcies or liens – While you should know if any of these major financial events has occurred, in cases of identity theft, you may be saddled with such negative marks on your credit report. Be sure to check the “Public Records” section of your credit report to verify that everything listed in this section is accurate.
- Active accounts – These should only include accounts that you are currently using; if you have closed an account or if you see an account on your report that you never did open, make sure you dig further to find out if this resulted from a clerical error or the more troublesome case of identity theft.
- Hard inquiries – When a lender checks your credit report, say for example because you are applying for a new line of credit, your credit score can dip slightly. As with the Public Records and Active Accounts sections, make sure all hard inquiries were related to lines of credit that you personally applied for.
While practicing financial prudence and being vigilant with your credit report is key to warding off debt, should divorce, unemployment or some other unexpected, financial crisis arise, you may need the help of an experienced bankruptcy and financial expert to help guide you through the storm. We encourage those facing such circumstances to learn more about their options and receive professional advice regarding the best manner in which to move forward.