Believe it or not, the new year is almost upon us. Whether you hang a new calendar on the wall, start a new datebook, or simply watch your computer’s calendar flip over to January 1, that clean slate is yours to enjoy. Now is the perfect time to get your affairs in order and think about what you want to accomplish next year—and what you’re saving up for. And, while you’ve still got a couple days left, it’s also a perfect time to reflect on 2011. How’s that credit score looking?
Everyone is entitled to a free copy of their credit report from each of the reporting agencies once every 12 months. If you’re concerned about your financial future, it’s in your best interest to check your report and look for errors. There’s also no charge for reporting a discrepancy if you think there’s a problem with your report. Problems may be bureaucratic errors, or they could indicate that your identity has been compromised. Watch out for incorrect dates, amounts, and, of course, loans or credit lines you didn’t establish.
You can’t email the credit agencies yet, so you’ll have to write an old fashioned letter and send it by certified mail. The extra time and postage are worth it when a few words could improve your fiscal future. The Federal Trade Commission even has a sample letter for you to copy. Just stay away from the commercial “free” credit reporting sites, and remember that you never have to provide a credit card number in order to obtain your report.
We’re all busy people, so it’s easy to let due dates blow past. Before you know it, that bill is late and you’ve got extra fees. Even if you pay off what you owe the credit agencies frown on inconsistent payment. Many creditors and businesses offer automatic payment options, and most banks also offer bill payment services. Simple offers online bill payment to make recurring payments painless, even if the companies or individuals you’re paying don’t provide an easy solution.
For those bills that are less regular, or for those of you wary of the automatic payment method, you can have your phone or desktop calendar to send you reminders. A few minutes of extra work now can save a lot of grief later, not to mention late fees.
Everything a credit counselor can do, you can do for yourself with research and time. Even so, many of us would rather seek help from a professional. Unfortunately, there are many scams that promise to make your credit problems disappear. Look for a counselor who will offer you sound fiscal advice toward improving your financial future. Beware of grandiose claims about how much can be accomplished; there are no overnight solutions.
Contrary to what you might think, paying down the balance on your credit cards each month may not be the best thing for your credit score. The system is weighted so that lenders can find the people most likely to carry balances and pay bills on time; those with the highest scores make the most money for lenders because they reliably pay the most interest.
So, have you requested your 2011 credit report yet? The real, non-scamming, non-spamming, authorized and endorsed by the FTC credit report site is annualcreditreport.com. Go do it. It takes about ten minutes, and you’ll know for sure whether that one time you “lost” a Netflix DVD has made it to your credit history. You don’t even have to give them your email address. A few last minute pointers:
All done? Great. We’ll see you next year!
Kit O'Connell is a writer, editor and citizen journalist living in Austin, Texas.
The illustration by M.K. Perker for Simple Finance Technology Corp. is available through Creative Commons license (by-nc-nd 3.0).
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