Tip #3: Request Copies of Credit Report from 3 Credit Bureaus (Equifax, TransUnion, Experian)
Do you know that you can get a copy of your credit report from all three credit reporting agencies every 12 months for free? You don’t want to request it any more than once every 12 months. If you do it will affect your credit score in a negative way. I personally request mine every 12-18 months. Unless you have a major amount of credit cards or outstanding loans, every 12-18 months should be fine. . If you do then that something we should definitely address.
When you receive your credit report, compare what you have to what is showing on the credit report. If there are any discrepancies take note and do your research. It can be quite time consuming but well worth it to clean up your credit.
The two most significant things that affect your credit score
- length of time you have had a credit card or loan open and
- credit utilization
A good rule of thumb is you want a lengthy credit history so don’t close out that card that you have had since college. Another good rule to follow is keep your credit utilization to 30% or below. I know this requires a little bit of math, but you can do it. Credit utilization is the total outstanding balance you have divided by your credit limit (or availability).
For example, if you have one credit card with a credit line of $5,000 and a balance of $1,000. You divide $1,000 by $5,000 to get your credit utilization. In this case it is 20%. (1,000/5,000 = .2 next multiply .2 x 100 to get the percent value of 20%). This credit utilization is within the ideal range of below 30%.
If you have one credit card with a credit line of $5,000 and a balance of $3,500. You divide $3,500 by $5,000 to get your credit utilization. In this case it is 70%. (3,500/5,000 = .7 Next multiply .7 x 100 to get the percent value of 70%). This credit utilization is NOT within the ideal range of below 30%.
Let's look at total credit utilization.
Credit Card 1: Credit line: $5,000, Balance $1,000
Credit Card 2: Credit line: $9,000, Balance $3,000
To calculate your credit utilization, you add the balance of each card ($1,000 + $3,000 = $4,000) then divide that by the total credit line of the two cards ($5,000 + $9,000 = $14,000). In this case, the credit utilization is 28.6% (4,000/14,000 = .2857 Next multiply by 100 and round to get the percent value of 28.6%). This credit utilization is within the ideal range of below 30%.
Be sure to check back regularly for more tips on pursuing your best self. Reach out via the contact box, phone, or email if you have any questions!