DIY Free Year-Round Credit Monitoring–here’s what I do.
Whether your’re thinking about filing bankruptcy, trying to figure out how to avoid filing bankruptcy, or just looking for ways to improve your credit, your credit report is the most important piece of information “on you.”
Sadly, it’s also something to which most consumers have little control or access. The bureaus decide what goes in and what comes out. It’s difficult and time-consuming to correct errors.
My bankruptcy clients and I spend a lot of time going over the information in these reports. It’s a bit of catharsis and a bit of triage. We all have our skeletons, trust me. Don’t be ashamed of yours. Credit reports can be bad trips down memory lane. They can be frustrating reminders of bad decisions. They can be infuriating evidence of stolen and trashed identity.
Whatever they are, you should never ignore the information contained in your credit report.
I sometimes meet clients who have purchased credit monitoring from a bureau or credit card issuer. I hate to see people waste money, so I always make a point of telling them that there is no reason to pay anyone to do something that be done online, for free, without a hassle.
Here’s my how to:
Step One: Consider freezing your credit with each of the three credit bureaus Experian, Equifax, and TransUnion. Freezing your credit means that you pay the bureau $3 to “freeze” access to your file, and they send you a PIN that you must have anytime you wish to “thaw” your file. You’ll need to thaw the file whenever you apply for a credit card or when you wish to give someone (a potential employer perhaps) access to your file. This is great for consumers because it means that they are protected from identity fraud, know exactly who’s accessing their file, and BONUS are safe from the lure of the department store charge card come-on at check out. (It’s hard to impulse-open a Macy’s or Target account when you’ve got to go home to get your PIN number before you can pull the trigger. Instant discipline. Yay!)
Step Two: Pull your credit report from each bureau once a year for free using AnnualCreditReport.com. The way to do this is to pull from one bureau this month, another bureau in four months, and the final bureau in 8 months. Yes, you’ll need that PIN number if you’ve frozen your file. Avoid any website that offers free credit reports other than AnnualCreditReport.com AnnualCreditReport.com is the website authorized by the Feds to provide free annual credit reports as ordered by Congress. All of the other websites have some variation on a scam that will enlist you in monthly monitoring, credit score watching and other wastes of time and money that you don’t need.
Side Question. Do you need your FICO score? We’ll you can get it, but you’ll have to pay extra. And I’m not sure the number amounts to much of anything unless you’re planning to buy a house in the foreseeable future. Don’t judge yourself by that number gang. Life is too short. Pay attention to paying your bills on time, making minimum payments, avoiding default, and keeping your debt ratio low.
Step Three: Look at your reports. Check for errors. Look for mistakes, false reports, failures to mark debts as paid, etc. You may have a violation of the Fair Credit Reporting Act. Call for more information if you think you do.