Don’t Get Spooked By Your Credit Report

October is all about treats and scary stories. Growing up, stories with ghosts and ghouls were the creepiest tales to tell. But adults have a different set of fiends to face.

One of the spookiest is the dreaded credit report, a piece of paper with immense power over our financial future. A haunting tale featuring this particular foe tells the story of a woman who went to the bank to apply for a small loan and fell into a panic when the loan officer told her “We will need to pull your credit report.” She wasn’t prepared for this and didn’t know what would appear on this piece of paper. All she could do was await her fate…

Avoid Spooky Surprises in Your Credit Report

While the ghouls that scared us as children may not be real, credit reports and the power they hold to shape our financial futures are. But that doesn’t mean they have to be scary.

One easy strategy to tackle the fear is to take matters into your own hands. Stay informed on your credit report to avoid scares when your credit report is pulled. Knowing what is on your report can also help you understand how to improve your credit score and to identify any fraudulent activity early.

Annual Credit Report is a resource that allows you to pull your credit for free, once a year. For a fee, your credit score can also be accessed at myFICO.

Understanding the Beast

After taking this brave first step, you’ll have your credit report in your hands (or on your screen). Don’t worry, it’s okay open your eyes.

The credit score is the three-digit number usually found near the top of the page.  This number is generated by a series of formulas using info collected by three credit bureaus: Transunion, Experian and Equifax.  This score is often the first determinant of whether you will get approved for a loan. The score you need for approval varies depending on your lender. 670 to 739 are considered to be “good” credit scores, and the average credit score in the United States is 698.

If you see that your score is a little low, first check out your Report Summary.  The number in the field titled “Available %” drives your score.  The higher the percentage here, the better your score.

Next, review the Trade Lines section.  Trade Lines indicate activity for loans, credit cards or accounts, and public records.  It also provides limits, balances, and any past due activity. Check this section for red flags – like accounts or activity you don’t recognize. Keep in mind that any cards, loans, or other bills that have been paid off or closed may still appear on your report.

You can dispute any inaccuracies by contacting the bureau who generated the report at the following websites:

Equifax Disputes

Experian Disputes

Transunion Disputes

The Inquiries section is also a great place to check for red flags. This shows when your credit report has been pulled and by whom. If you see any inquiries requested that you were not aware of and did not initiate, this could be a sign of identity theft.

Find Help to Defeat the Monster

After, you’ve reviewed your credit report, you may find that you need some help with getting your credit back on track. Credit counseling can help you get started on the path to a scare-free credit report. The Federal Trade Commission Consumer Advice has information and resources for credit counseling.

Another tool to create a brighter financial future is through financial planning. Here are some websites with information on Financial Planning: MyMoney or Investor.gov.

And don’t forget that WEV is also here to help you on your credit journey. Check out Resources for Your Money for articles, classes, and webinars to help you stay on top of your finances.

#financialresilience #financialempowerment #personalfinance #financialsuccess #creditscore

Author

Stephanie Martinez

Date

October 31, 2022