Credit Building-Some Thoughts to Consider

Working to improve our credit score doesn’t necessarily mean opening a new line of credit and starting to make payments. One of the first steps on the journey to build your credit is knowing what is on your credit report. If you haven’t looked lately, you should check it out. You can visit www.annualcreditreport.com, and get copies of your report from all three bureaus. Beware of companies that offer “free credit reports” but require you to put in a credit card number prior to pulling your report. Often times, this enrolls you in a program that will charge your card monthly.

Also, before pulling your credit report, consider if it is safe for you to do so. Are you using a computer where your activity can be tracked? Is someone trying to locate you, who might have access to your report? Anybody who has your social security number and date of birth could potentially access your report. The address you enter to pull your credit report will be listed, and anyone who pulls your report will see your address. If you are concerned about the safety of pulling your report in anyway, please contact an advocate at ROW at stlrow@sbcglobal.net, or an advocate at the National Domestic Violence Hotline (1-800-799-SAFE), to talk through potential safety risks of pulling your report.

Once you have pulled your report, review it for any old or inaccurate information. Checking your name, date of birth and social security number is a good place to start. From there, you want to see if there are any collection accounts with a date of last activity (DLA) greater than 7 years, or an account paid as agreed older than 10 years, if there are, highlight them. Next see if there are any accounts you don’t recognize or didn’t authorize be opened, highlight those as well. Once you have completed these steps, mail a letter requesting that old items be removed, and disputing any accounts that are not yours. Taking these steps will increase your score without costing you more than your time, few sheets of paper, and postage.

Something else to consider when building your credit are alternative, or nontraditional lines of credit you might have. Do you pay for daycare, a cell phone, or utilities? Anything that you can show you paid on time for a minimum of 12 months is considered a positive line of credit. Ask your daycare provider, cell phone provider, or utility company for a credit reference letter identifying the number of months (12 or greater) that you have paid on time.

Finally, remember to try to pay bills on time, or at least prior to 30 days late, and keep records or receipts from bills you pay regularly and on time. Review your credit report a minimum of annually to dispute any old or inaccurate information, and avoid opening/closing several lines of credit at one time. Happy Credit Building!