1. Pull reports from all three major credit reporting companies
The three big firms that generate reports for consumers are Experian, Equifax and TransUnion. While the reports they produce are similar, they are not exactly the same, said Palmer from NerdWallet. Make sure that you pull reports from all three at least once a year.
You are allowed one free report from each of the three companies each year, according to the Federal Trade Commission. To get your report, you can order from annualcreditreport.com, a website authorized by Federal law.
2. Check for mistakes
Mistakes on credit reports can range from a misspelled name, to having a loan or credit card that you did not open listed on your report. If there is a mistake, it could lower your score. Resolving the error will be the quickest way to improve your score, Schulz said.
Fixing an error is not always a simple process. It should first start with filing a dispute letter to the credit reporting company, according to the FTC. The credit reporting company will investigate and give you the results in writing. Then, you should also file a dispute with the creditor giving the incorrect information. Otherwise, they may report incorrect information again.
“Building good credit is hard enough, so you want to make sure you’re not getting penalized for mistakes you didn’t make,” said Schulz.
3. Look for fraud
If someone has opened an account fraudulently in your name, one of the only ways you’re going to find out about it is on your credit report, Schulz said. Checking it regularly will help you detect and resolve issues before they have an adverse effect on your financial health.
4. Take stock of debt
Your credit report may be one of the only places where you see all your debts and accounts in one document, Schulz said. It “can give you a different perspective on your own financial situation,” said Schulz, and help you better understand how you might want to tackle the debt you’re facing.