If you’re not checking your credit at least once a year, you’ve leaving yourself a risk of identity theft or allowing a bad debt to build on itself. ave your money in the long run by tracking your credit carefully. Just make sure to avoid these six common Mistakes When Checking Credit
Paying for Free Reports
Under federal law, you’re entitled to one free credit report each year. You can get your free report online in a matter of minutes and it won’t cost you a penny. If you haven’t gotten your free report this year, don’t even think about spending a dime until you do.
Only Checking With One Bureau
There are three big national credit agencies out there, and they all work separately. That means you credit could be perfect according to one agency and absolutely awful according to another. They all get their information at different times and from different sources. As a result, you need to check your credit with each agency to get the full picture.
Asking For the Wrong Score
Different industries use different formulas to calculate your credit-worthiness, so you can get misleading information by asking for the wrong credit report. If you want to know if you qualify for a new mortgage, for example, don’t request a report tailored to credit card companies. They use different criteria, so the report won’t do you much good.
Misinterpreting the Score
You need to understand the scales used on your credit score to get a sense of what the number means. While most FICO scores operate on a scale from 300 to 850, others use a scale from 150 to 950. Just taking a quick glance and seeing the number 650 on a paper doesn’t actually tell you much. Check the scale to see where you fall relative to others. Also, don’t just look at the score. Check for any listed debts in poor standing, too.
Not Keeping a Copy
Save yourself a big headache by always keeping your credit reports stashed away somewhere safe. Even if you’ve got perfect credit without a black mark anywhere, having a paper copy in your records can help you if you need to contest false reports or charges in the future. For example, if an unpaid car loan suddenly shows up on your report next year, having an old copy to compare against could prove very valuable. Just make sure to stash old reports somewhere safe to reduce the risk of identity theft.
You checked your report last year and found a score of 760, but this year it’s suddenly down to 758! What on earth went wrong? Absolutely nothing. Your credit score naturally fluctuates by a few points all the time and it’s nothing to worry about. Don’t stress out about tiny changes. That two-point drop might reflect a tiny change on your credit card balance or a tweak in the agency’s calculations. It doesn’t signify anything important about your credit, so don’t fret about it.