Extra Credit: Know and Improve Your Credit Score

If you’re hoping to buy a car or home someday, checking and improving your credit score now can help you get there. Once every 12 months you can request a free copy of your credit report from each of the three major credit reporting agencies – Equifax, Experian and TransUnion – at AnnualCreditReport.com.

To build the best score:

  • Pay your bills on time. This is the biggest credit killer. Set up auto payments whenever possible.
  • Keep balances low.
  • Apply for and open new credit cards only as needed.
  • Pay off debt as quickly as possible.
  • Don’t close unused accounts.
  • Check for fraud and identity theft.

If you’ve messed up in the past, it may take a while for your credit to recover. Maintain good credit habits and over time your score will grow. But don’t let errors and identity theft ruin the credit you’ve built. Here’s what to look for, and what to do about it:

  • Print the reports and check all three for inconsistent or inaccurate information.
  • Look for any information you don’t recognize, including accounts, addresses, inquiries, delinquencies and collections.
  • If you’ve received bills, calls or letters for accounts you didn’t open or things you didn’t buy, contact the agency involved to find out what’s going on.
  • Contact the credit reporting agencies directly to discuss a potential problem on your report.

Whether your credit history is spotty or squeaky clean, consistently checking and improving your credit score is the key to a healthy financial future.