Spring Clean Your Credit Rating For A Cheaper, Better Life
A lot of people focus on spring cleaning their homes at this time of year – but what about looking at your credit report instead? It’s vital to check your current status at least a couple of times a year – if not more – and given that the Christmas and holiday season can be a little weighty on the wallet, it makes sense to check things through at this time of year. And the benefits can be huge. Not only can a good credit score ensure you can borrow money ar dirt cheap rates, but it also gives you peace of mind. Let’s take a close look at how to spring clean your credit file.
The first step is simple – sign up at one or all of the three major credit reference agencies. Once you have your account, you will be able to see your financial history, including your management of bills, loan repayments, personal information and bank account history. Check in with Equifax, Experian and CallCredit to get yourself up and running.
One of the first things you should do with your report is check for any inconsistencies. Unfortunately, financial fraud is a lot more common than you might think, and there could be a criminal using your details to sign up for credit cards or get loans under your name. If there is any evidence of wrongdoing, get in touch with the lender and let them know asap. Also, look out for any mistakes in your file. They do happen from time to time, and a quick call to the reference agency and the lender should be enough to sort it out.
Highlight problem areas
Your credit report will also tell you where you are struggling. There will be information on payments missed or any accounts that are in default. If you do have any sign of financial mismanagement on your file, your score is going to take a big hit, so make a plan to fix things as soon as possible. You’ll need to look around for more details on debt consolidation, repayment tactics, or any other way of getting rid of your debts, and tackle the problem head-on. You’ll find that as soon as you start paying back your bad debts, your credit report will start to improve.
Build up your credit
Now, once all the vital stuff is out of the way, you can focus on slowly getting your credit file up to speed. There is much you can do, from strengthening your personal profile through to losing unhelpful ties from your past – if you have a previous partner that ran up big debts several years ago, for example. Look at all your old credit cards, store cards and bank accounts that you don’t use anymore, too. Close them down, and you won’t be penalized for them as theoretical sources of credit. And finally, if you have a poor rating, consider using a credit-building card. The interest rates on these cards are sky high, so it’s vital to pay them off in full every month – with no exceptions. But what they will do is show you are borrowing responsibly, and bump up your score over a relatively short period of time.