Largo, FL – (August 19, 2014)- If you watch only a few hours of television a week, you have seen many commercials suggesting that you order the free credit report that is legally due to you annually. This advice is sound, even though navigating the sites to find the true free credit report may be difficult due to the “monitoring” service the credit reporting sites want you to subscribe to. This week’s commentary is not about which site is best. Instead, focus on the concept of monitoring your report and maximizing your score. Here is a simple plan to do just that:
1. Get your free credit report: Each of the three credit bureaus (TransUnion, Equifax, and Experian) offer a free report. The credit score is typically an additional cost. The score given may not be the same scoring system used by most lenders, but it will give you a comparison of where you rank against other consumers. Add a reminder to your calendar to request the report annually.
2. Freeze your credit report: Each of the three credit bureaus offer a free service that will freeze your credit report. The freeze stops any new credit accounts from being opened, which is critical considering how many retailers have had their records breached recently. When you truly need a new car loan, credit card, or mortgage, each of the credit bureaus provides a free temporary lift of the credit freeze. This allows you to set a small window of time for the lender to view your credit and open the account you authorize.
3. Use credit wisely: Pay accounts within 30-days of their due date and only carry balances less than 50% of the available line of credit. The modest use of available credit will support a high credit score.
4. Pay collection items: Fair Isaac Corporation, the developers of the FICO scoring system, recently announced that paid off collection items will no longer have a negative impact on your credit score. The company also states that the scoring model will give less weight to unpaid medical collection items than they did in the past. This is great news for your credit score, if you pay off the collection accounts. Still, even small open collections could have a devastating negative impact on your score.
5. Keep available credit lines open: It seems counterintuitive to keep accounts open that you are not using, but closing accounts, especially older accounts, could lower your score. Long account histories and ample available credit generally lead to higher FICO scores.
Have a question about your credit? Contact us at Fiduciary Funding 727.209.1020. We can provide advice tailored to you or visit our web site at www.fiduciaryfunding.com.