These days, you’re probably doing a lot of work to keep your finances in good standing.
That can include everything from making sure all your bills are paid on time and in full every month, or that you’re sticking to a sound financial plan. You might also be working hard to reduce the amount you owe on your credit cards.
And while all of those strategies are great ways to get a handle on many aspects of your finances, there is more you should be doing as well.
For example, to ensure that your finances are as healthy as they should be, it’s a very good idea to order copies of your credit report as often as you can. Under federal law, you’re allowed to get one free copy of this document per year from each of the three major credit bureaus, and the best strategy for doing so may be to order one every four months, rather than getting all three at the same time.
Studies have shown that as many as 80 percent of all credit reports contain at least one error, and often, these mistaken entries can drag down your credit score. Errors can show up on your record for a number of reasons, including fraud, but the most common is that companies collecting debt may simply enter information incorrectly, such as by mistyping a Social Security number.
Of course, you should also keep in mind that while you are entitled to three free copies of your credit report per year, that document is not the same thing as your credit score. Usually, ordering your credit score from a reporting bureau will cost you some money, and may not provide as much detailed information as your credit report would anyway. Your credit report will list all the accounts in your name, as well as other details.
If you check your credit report and notice that an account has been added to your report incorrectly, you should contact the credit bureau that issued the document to let them know about the error. You will be required to prove that this mistaken entry has nothing to do with you; and if you do, it can give your credit rating an instant boost.
Image: DrBacchus, via Flickr.com