National Get Smart About Credit Day is Oct. 19, and we hope you take the opportunity to review your credit report and take action, if needed.
Get Smart About Credit Day was launched in 2003 by the American Bankers Association Education Foundation as a way to help educate young adults about the importance of their credit score. While it may seem like just another “national day” in the slew of obscure reasons to celebrate, we’re strong proponents of Get Smart About Credit Day and its core message.
Credit is a vital part of our financial system and plays a pivotal role in everyone’s personal finances. Credit ratings can affect your approval for a mortgage, your ability to rent an apartment, your insurance ratings or the capacity to start a small business. This is why it is important for everyone – both young and old — to use Get Smart About Credit Day as a chance to evaluate their own credit situation, and to take action to improve it.
Here are a few simple things you can do on Oct. 19 in honor of Get Smart About Credit Day.
Check your credit report
You are entitled by law to get a free copy of your credit report (from each of the three agencies) once every 12 months. While the report will not contain your actual credit score, you’ll be able to review the information in it to ensure it is accurate. Reports will not be provided to you automatically, so it’s up to you to request them. You can do this online at AnnualCreditReport.com.
It’s important to note that AnnualCreditReport.com is the only authorized source for consumers to access their annual credit report online for free. Many other sites have appeared over the years – some legitimate, some not – that offer a similar service.
When you receive your credit report, review all the information and check it for accuracy. You may even want to meet with your banker to help get a better grip on the information in the report.
If you find inconsistencies, immediately take the necessary steps to correct them. It can take a long time to recover from detrimental information on your credit report, so the quicker you can fix it, the better.
This article provides some tips on how to review your credit report and what you can do if you uncover errors.
Review your use of credit cards
Credit cards have many convenient benefits and often come with concrete benefits, like cash back on purchases or airline miles. However, missteps when using credit cards can be devastating to your credit.
Building up debt through consistent use of credit cards can lead to high interest payments and negative effects to your credit score. That’s because the amount of debt that you carry on your credit cards is calculated into your credit score negatively.
Use Get Smart About Credit Day to examine your use of credit cards. Are you using credit in a responsible manner? Are you paying off your monthly payments, or are you carrying debt over into the next month? If you’ve got lots of debt, commit yourself to paying off that debt and begin being more responsible about how you use your card.
Make your debt a priority
If you have debt, use Get Smart About Credit Day as an opportunity to evaluate your situation and develop a game plan to reducing your debt. For many people, paying off highest-interest debt first, while maintaining the minimum payment on other debt, is a good way to start. Once the high-interest debt is paid down, tackle the next highest and so on.
The faster you pay off your debt – the less you will pay in interest in the long run and the better your credit score will become.
This article provides some additional insights on tackling personal debt.
Don’t let a poor credit history in the past keep you from following through with these steps. There is no such thing as a lost cause. Overcoming credit setbacks may be difficult, but ignoring the problem will only make it worse.
Remember, the best time to take control of your finances with smart decisions and attentiveness is always now! If you’ve got more questions about your credit, contact your local MidWestOne banker.