Maria Mines asked: According to the Federal Trade Commission, each year you are entitled to one free credit report from each of the three major credit reporting agencies Experience, Trans-Union, and Equifax. Budget-wise families order one report every four months or so, keeping tabs on their scores without paying a penalty for too many inquiries.
Directly from the source: The Federal Trade Commission’s own website spells out: ”Only one website is authorized to fill orders for the free annual credit report from government you are entitled to under law annualcreditreport.com. Other websites that claim to offer ‘free credit reports’, ‘free credit scores’, or ‘free credit monitoring’ are not the part of the legally mandated free annual credit report program.” If, after singing along with the catchy tunes, you listen carefully at the end of the most popular commercials, you hear the disclaimer, ”…with enrollment in Triple Advantage”, a subscription service.
The majority of Americans do not know how to manage money, and they have absolutely no idea how to manage or make the most of their credit. They especially do not understand how they compromise not only their credit but also their employment and educational opportunities when they neglect their credit scores. Most of all, the majority of Americans have inadvertently, selfishly buried themselves under monumental credit card obligations they have absolutely no hope of paying-off in their lifetimes. Bankruptcies and foreclosures have skyrocketed in the last four years, because most Americans simply do not understand one simple rule of domestic finance: do not spend money you do not have. Especially when you cannot absolutely depend on your continuing employment, you should cut back your family’s expenses to the absolute minimum.
Use your free credit report to establish a financial strategy. Using your credit report strategically, you can improve your scores. Ideally, you will want to elevate your score above the magical 720, becoming a preferred borrower and therefore qualifying for incentives, rewards, and substantially lower interest rates on all your credit purchases. If you wish to secure a home mortgage at a decent rate, you should at least have a 720 credit score.
Working with your credit report, place your highest priority on correcting errors. In some cases, the credit reporting agency will reserve the right to investigate cases about which you complain; with patience and persistence, you will almost always prevail in your disputes. Place your second highest priority on closing accounts you have not used and do not plan to use. Do not, however, close all your accounts, because you need to maintain a good credit history with a few accounts to maintain your good score. As a rule of thumb, you should pay-off and close retail credit accounts, because they tend to spark impulse buys instead of supporting essential purchases.
If you can, transfer balances to the credit account with the lowest interest rate, leaving the accounts open but making only tiny purchases with those cards and paying-off the complete balances every month. When you make payments on the one account with the highest outstanding balance, try to pay the minimum plus at least ten percent. In other words, if the minimum payment is $250.00, pay $275.00, so that you bring down the principal as well as paying the interest on the money you have borrowed.
David
