Once a year you should review your credit report. Since you already have your financial documentation out, tax time is the perfect time to review your report. If you have never reviewed your credit report then you may have many items that need to be disputed. Taking the time to fix your credit report may take quite a while the first time. But once your report is correct and accurate you can check your report once a year confidently.
You can get a free copy of your credit report at annualcreditreport.com once a year. This is truly a free copy of your credit report. Other web sites tell you that you can get a free copy of your credit report if you sign up for their monitoring service. Using a monitoring service is not necessary unless you do not want to monitor the work yourself.
Once you have a copy of your credit report highlight any errors that you see. Make a list of any errors by the individual credit bureaus (Equifax, Experian, TransUnion). Write dispute letters to each credit bureau listing 2 or 3 items per letter. Keep disputing until all items on your credit report are deleted or corrected. This will take more time if you have never disputed before. Do not be discouraged if you have never done this before. Your credit did not get that way overnight and you certainly won’t get it fixed overnight either. It may take from six months to one year to get your report completely accurate. An accurate report is critical to having a great credit score.
Now that your credit report is accurate you can start building up your credit. Simple things like paying your bills on time and in full will help your score continue to rise. Then by reducing your revolving (credit card) credit, your credit score will continue its upward path. Having installment loans such as car payments or mortgages will also help your score but they must be paid on time every time. It is best to setup automatic payments on your credit cards and installment loans so that you never have a late payment. Late payments make up over 30% of your credit score. Even if you set up automatic payments to only make minimum payments then you go back and pay however much more you want at least your payments will never be late.
By using tax time to remind you that it is credit report time you can stay on top of any problems that might appear on your credit report. Good credit is vital in today’s economy and having errors on your credit report will hurt your credit score. If you need someone to assist you in disputing errors on your credit report don’t be afraid to hire a professional. There are legitimate credit repair companies out there who can help you.