How to Manage My Credit – Using These 5 Easy Steps

How to Manage My Credit

How to Manage My Credit

Managing your credit is important in ensuring your financial security remains in a healthy condition. I learned how to manage my credit using 5 easy steps. It is a process that involves checking your credit report and setting alerts for all credit report activity. Additionally, you need to take measures to protect yourself from credit card fraud and identity theft.

Here are the 5 steps:

Get your free credit report

Your credit report is available from three major credit reporting agencies in the country. These are Equifax, Experian, and TransUnion. All three agencies are required by law to provide every consumer with a free credit report once a year. Full details of your credit report are available on the Annual Credit Report Site Annual Credit Report. It is an online hub that houses the three credit agencies.

To use the site, enter identifying information in a form and select the types of reports you want. Your credit report will then be generated securely on the site. Do you prefer receiving your credit report by mail? Just fill the Annual Credit Report request form here credit report by mail, and send it to this address:

How to Manage My Credit

Annual Credit Report Request Service

PO Box 105281

Atlanta, GA 30348-5281

One or all three agencies will send your report via mail, once the request form is received. You can also apply for a free credit report once a year by calling 1-877-322-8228.
Please note that you have the option of requesting your free credit report from all three agencies at once. However, it makes better sense to review your credit report from a different agency once every four months. This way, you will be able to review your credit details more than once a year. It is a great way of regularly keeping a watchful eye on your financial activity at no cost.

Credit Report Triggers

Your free annual report from credit reporting agencies is one way of verifying the accuracy of your financial information. However, there are other ways of doing it free of charge. Whenever you apply for new credit, e.g., an auto loan, mortgage, or credit card, your new creditor pulls your credit information. This process is required to confirm the details on your application.

When these report triggers occur, the law allows you to request a copy of your credit report. This is accomplished by asking the creditor to provide the information they reviewed when making their credit decision.How to Manage My Credit

It is also important to confirm your credit information before making a large purchase such as a car or home loan. Do not wait for the new lender to discover issues with your credit that may take time to resolve. Verifying your credit status beforehand will ease your new loan application process.

For this purpose, use your annual (or rotating) credit reports, as well as the reports generated by new credit triggers.

Purchasing Credit Information

One of your rights as a consumer is getting access to your credit information free of charge. However, you also have the opportunity to purchase credit information directly from Equifax, Experian, or TransUnion. These bureaus provide an online service where you can view your credit report and sometimes, your score. This access will cost a monthly or annual subscription fee. The services provided range in price depending on the packaged product you select.

You can also access a 3-in-1 credit report, which contains all three of the credit agencies’ reports in a single 3-in-1 credit report . This service also varies in cost, and only requires a one-time fee. Typically, you don’t need to purchase your credit information. This is unless you have used your free report privilege for the year, or need to monitor your credit often.

Protecting Your Credit

One reason for free consumer access to credit reports is the need to review the information periodically for accuracy. The influx of new technology has created greater opportunities for criminals to use your personal information for malicious purposes. It includes obtaining credit cards, bank accounts, or loans where you, unknowingly, are responsible for the debt.

According to CreditCards.com, nearly 31.8 million U.S. consumers experienced credit card breaches 31.8 million U.S. consumers in 2014 alone. Reviewing your credit report is a necessary step toward preventing fraud and identity theft. This allows you to detect and stop any suspicious activity linked to your financial identity, which can be very costly.

Credit Monitoring Services

Even though I know how to manage my credit on my own, I can opt for a credit monitoring service. Several technology-based organizations technology-based organizations provide credit monitoring for a monthly or annual subscription fee. These services send you alerts when changes occur in your credit report. This includes a new credit card or loan, a hard inquiry, or a change of address or employer.

Credit monitoring is a sound way to be proactive in managing your credit, but only if you can justify the cost. It is a smart option if you are about to take a new loan or make a major purchase on credit. It allows you to correct any erroneous information or fraud, well before it ruins your credit report.How to Manage My CreditPlease note that credit monitoring services differ significantly in price depending on the company you use. Furthermore, the benefits they offer may be similar to rotating your credit report checks on your own. Once I learned how to manage my credit, using a credit monitoring service became unnecessary.

More importantly, credit monitoring services collect data differently from credit reporting agencies. This may cause a substantial delay in getting accurate information about new credit accounts, inquiries or errors into their reports. Before using credit monitoring services, confirm that what is available for free is adequate for your purposes.

How to Manage My Credit – Summary

It took me time and energy to learn how to manage my credit, without spending much money. All you need are the free credit reporting resources available online or via mail from credit reporting agencies. You should also remember to request a copy of your credit report after every new inquiry for credit.

If you need more help with credit monitoring, tap into the world of credit monitoring services. One or more of these strategies helped me perfect how to manage my credit in an efficient, low-cost manner.

 

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6 Comments

  1. Hi there,

    You have provided many important points to do with credit protection which makes it quite easy and understandable to follow. 

    I know of too many people who would have loved to have this information before their credit got messed up.

    This is very valuable information, particularly these days and I appreciate you writing it in the straight forward easy to understand way that you did.

    Cheers,
    Orion

    • Orion,

      Thank you so much for your positive comments.  I am pleased that you found the article easy to read and understand.

      More often than not most people don’t monitor or manage their credit. When it comes time to finance a house or a car they discover that their credit score is not quite up to par, so they either can’t buy or must pay higher interest costs.

      It’s good to be prepared at all times, as you never know when you will need to finance something. In order to achieve this, monitor your credit score regularly and request a free credit report each year to identify fraudulent activity or errors on the report.

      All the best,

      Patrick

  2. Why would you need to purchase your credit information from the credit reporting agencies? I don’t really understand that.

    I know you can get a free annual credit report, but don’t understand the need to purchase your own information.

    I definitely take advantage of the free annual credit report. It’s nice to review and see what should or shouldn’t be on your credit report.

    You have pointed out some great tips here. Do you have a preferred credit monitoring service?

    Thanks for sharing your post. I think it’s great and helps to get the word out, so people are more sensitive to their personal finances.

    • Hi – Thanks for your insightful comments.

      It does seem like we should be able to get our credit score for free, just like our credit report.  However, the way its setup now that’s just how it works.

      Now there are places where you can get you credit score for free like https://www.creditkarma.com/fr… or https://www.quizzle.com/what-i…, but you will have to provide some personal information to sign up with them on their sites.

      Some credit card companies are offering a free credit score for certain cards, like American Express and Citi Visa, however they are select cards and are not widely available. 

      You can also get your credit score for free if you are a Quicken subscriber, but it’s only one agency credit report.

      If you need to go with credit monitoring, I’d go with myFico service https://www.myfico.com/.

      You get all this and more:

      Instant access to a 3-bureau credit report and FICO® Scores—including the FICO® Scores most widely used in mortgage, auto and credit card lending, and the newly released FICO® Score 9Quarterly access to a new, updated 3-bureau credit report and your most widely used FICO® ScoresMonitoring of your credit reports from all 3 bureaus, with FICO® Score 8 updatesFICO® Score 8 historical tracking graph for each bureauIdentity theft monitoringLost wallet protection24/7 full-service identity restoration$1 million identity theft insurance

      A very nice service if you care about monitoring your score and protecting your credit or identity.

      Check out the details at their website.

      Patrick 

      Credit Squared

  3. Patrick, so with this Equifax hack, I am at the point where I would like to freeze my credit score and want to recommend that my children and family do so too. Clearly, Equifax and the US government does not seriously believe in protecting our digital information/IF. What say you? Should we freeze our credit score?

    • Hi Helen – It may make sense to freeze your credit, but it’s also going to cause you some hassles if you want to use credit in the future. You will be issued a pin and will have to use it each time you want to allow a potential creditor to access your credit score and credit file. You may also be limited on the ability to pull your free credit report each year.

      If you are not a victim of fraud yet, then the credit agencies will charge you a fee to freeze your credit. If you are a victim of fraud, most state law prohibits agencies from charging a fee to freeze your credit.

      If you use credit often, then my best advice right now would be to subscribe to a service like LifeLock (I do) to insure any future fraud attempts on your credit. I you are not a credit user then I think it’s okay to freeze your credit. Just be aware that you will have jump through some hoops if you need to use it in the future.

      Best of luck,

      Patrick

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