Smart ways to monitor your credit
Regularly tracking your progress is a good way to see how your efforts are helping your credit score and to identify any factors that may be slowing you down.
Start by reviewing your credit report. You’re legally entitled to receive a free credit report from each of the three major credit bureaus every year. Pull them all at once or separately in three stages over the course of the year.
Read the report thoroughly to confirm that all the information provided is current. Is your address correct? Is the data reported for each of your accounts accurate? Is there activity or an account that’s unfamiliar to you? Your credit history is an invaluable tool in helping you catch small problems before they grow into bigger ones. For instance, you may find that a bill you thought you paid is listed as past due or that a loan you co-signed isn’t being paid off on schedule.
If you find incomplete or inaccurate information, immediately contact the credit agency from which you received the report. Faulty information can mar your financial history and lower your credit score.
At the same time, credit report errors can also indicate identity theft. If you suspect you’re a victim, place a fraud alert on your credit report to prevent someone from opening new lines of credit in your name. If your credit card has been misused, you can contact your card issuer to cancel the card and initiate a dispute, and file a police report with your local precinct. You might also consider signing up for a credit monitoring service.
One thing to remember is that your credit history report does not include your numeric credit score, so you’ll want to review that as well. Pay attention to the “risk factors” or “potentially negative items” that are included with your score. These elements indicate what’s keeping your score from being even higher, such as high balances or frequent late payments, and the section may also offer insight into how you can improve your score. Putting all of this information together makes it easier to not only build (or rebuild) your credit but also set yourself up to reap the benefits of a healthy score.
— With additional reporting from Life and Money by Citi editors.