February is the month for romance, roses and chocolate! Perhaps a little less romantic, but February also can be the month to have an open financial discussion with your significant other. Money often can be a source of conflict and misunderstanding. Finally (even lower on the “romance” scale), let February be the month you designate to review your annual free annual credit reports. Who said financial advisors aren’t romantic?!.
Why bother, you may ask? Reviewing your credit reports can help nip identity theft at the bud. The recent large-scale theft of credit card information at Target is an unpleasant reminder of the pervasive problem of identity theft. Another good reason to check your credit reports annually is to save $$. A poor credit score can increase your borrowing costs on a loan even if the credit data are incorrect. That’s why it’s important you check your credit information because only you can identify possible errors that the 3 big credit agencies may have committed.
If you haven't checked your credit scores in awhile, here are the steps:
1. Go to www.annualcreditreport.com and fill out requested information. (if you prefer, call 877-322-8228 to find out how to apply for your credit report in writing or by phone).
2. If you’re online, select the option of receiving reports from all three credit agencies: Equifax, Experian and TransUnion. This helps you identify discrepancies or errors; credit agencies don't share information.
3. You should be able to print out your credit report per agency OR you can mail your reports by mail.
4. Once you have your report(s), review for errors.
Note your actual credit score will not be listed online – just your detailed credit report. You have to agree to pay additionally to the credit report agency to get your actual score. This is optional.
I recently pulled all 3 of my credit reports from the www.annualcreditreport.com website. My TransUnion and Experian reports were approx. 15 pages each. I looked to confirm all of the credit card vendors listed were correct (including closed accounts), and scanned payment histories to identify any errors. This took about as long as drinking a cup of coffee (5 minutes per report). My report also showed a list of agencies and creditors who inquired about my credit score – e.g. First Energy Service Company and the Social Security Administration. I didn’t see any errors this time around but I’ll have to check again to stay on top of things. I also reviewed my husband’s credit report and I ran an inquiry for my adult son. Even though my son has a short credit history, I verified no one took out a loan in his name or otherwise stole his identity.
Should you request information from all 3 agencies at once or stagger your information? Here’s what the website says:
The answer depends on you.
If you are thinking about buying something big soon - a new car or even a home - you may want to get all of your credit reports now. That way you can correct any mistakes on all of them right away.
If you are not planning a big purchase, requesting them over time might be a better choice. When you spread them out, watch for expected changes or suspicious activity throughout the year.
Whichever strategy you choose, mark your calendar so you know when you can request your next free credit report.
If you pull all 3 credit reports in February 2014, file away your information and wait until February 2015 to access www.annualcreditreport.com again. This time, select a different credit agency each 4 months so you stagger the credit information you receive. Put reminders in your calendar to do this. And don't forget to dispute any errors you identify in your reports!
Eve Kaplan is a Fee-Only (no products sold) Certified Financial Planner® Practitioner with 30+ years of investment/planning experience. Kaplan Financial Advisors upholds the highest fiduciary standards in the planning industry. Eve opened Kaplan Financial Advisors in 2004 to provide comprehensive financial planning and investment management services to single women and couples. Eve can be reached at 908-898-0549 or Eve@KaplanFinancialAdvisors.com. Visit her website at www.KaplanFinancialAdvisors.com
Copyright © 2011-2018 by Eve Kaplan
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