If you are like many Americans, your credit report is one thing you often forget to check. According to Transunion, 25% of Americans have NEVER checked their credit report and over 42 million Americans have a report with inaccuracies.
Many only tend to review once a problem arises such as being denied credit or suspected identity theft.
The fact of the matter is you should be monitoring your credit report on a regular basis. Being proactive will definitely help you keep things in order.
When speaking to clients, I often find many are unwilling or can’t afford to pay for a monthly credit monitoring service. Thanks to three companies, you can monitor your credit report and score with weekly updates.
Once you are signed up with these website or download the app, you will be notified of any credit alerts (applications, account changes and credit score, etc. )
I always recommend having all three, as it never hurts to compare the information each app is reporting.
Understanding your credit score and the makeup is simple:
- Payment history: (35 percent) – Are you making your payments on time? Timely payments account for the majority percentage of your credit score
- Amounts owed: (30 percent) – What are you current balances ? This includes credit card balances, loans, etc. Having too much debt can actually hurt you, in addition to carrying a high balance on your credit cards.
- Length of credit history: (15 percent) – Are you new to the credit game? The older your accounts, the better look it has on your credit report.
- Types of credit used: (10 percent) — The mix of accounts you have, such as revolving and installment.
- New credit: (10 percent) – Are you constantly applying for credit? Each time you fill out a credit application, an inquiry arises on your credit report. ( 1 or all 3 depending on the creditor) Each credit inquiry can cost you up to 2 points and will remain on your credit report for 24 months.
Being aware of how often your information is updated and maintained will help you learn to better manage your credit and be aware of what’s to come if you should decide to apply for a loan.
If you curious now about your credit report and score, be sure to check out the suggested apps and get your weekly updates of your credit information.
One feature I love about these apps; recommendations are given each time your score updates, you can see what your chances are of being approved for a ‘partner card or loan‘.
Whatever your choice in app, be sure to monitor and use your credit wisely.