Checking your credit after the holidays

Monday, December 12, 2016

It is hard enough to think about what is going to happen during the always hectic holiday season, let alone what to do after the wrapping paper stops flying and the refrigerator is bursting with leftovers. However, one task that should be at the top of everyone’s post-holiday to-do list is checking their credit report.

Monitoring your credit is the kind of small but important task that can easily slip to the bottom of the priority list, but not doing so can lead to unpleasant consequences. The frequent use of electronic payment methods and online shopping only reinforces the importance of paying close attention to what appears on credit reports, said Cindy Clampet, Oklahoma State University Cooperative Extension resource management specialist.

“Whether it’s for a job, a new place to live or a new car, someone will check your credit and that is the wrong time for surprises,” she said. “Regularly reviewing your credit report can help prevent identity theft and catch errors serious enough to possibly trigger a loan denial or higher interest rate on a credit card.”

Equifax, Experian and TransUnion are the three major credit reporting agencies. These agencies collect information from their members – businesses and organizations that provide regular reports on the payment behaviors of their clients – and publish that information in credit reports.

A person’s credit score is based on the information on the credit report. The score is a measure of how risky it is to offer credit to that person. The higher the score, the lower the risk.

Consumers are legally entitled to one free credit report each year from each of the three agencies. Copies of the reports can be ordered at www.annualcreditreport.com.

“You can monitor your credit for free year-round by requesting a report from a different agency every four months,” Clampet said. “Victims of identity theft who have a notation added to their credit histories are eligible to receive more than the three reports annually.”

Many credit card companies also offer free credit scores to account holders, but consumers should be aware these scores can be different than the score that would be used to assess credit worthiness in some circumstances.

“If you need help understanding your credit report, make an appointment with a non-profit credit-counseling agency,” Clampet said.

Also, www.myfico.com provides a detailed explanation of credits scores, while www.bankrate.com offers tools to estimate an individual’s FICO credit score.

For guidance on how to address errors on a credit report, consumers can go to the Federal Trade Commission website at www.ftc.gov. Instructions for disputing errors also may be found on the credit report.