4 Ways to Monitor and Protect Your Credit Rating

Possibly the most important component of your financial future is your credit rating and associated FICO score, which provides lenders an idea of the level of risk associated with making you a personal loan. Whether or not you intend to use credit to finance any future purchases, your credit report and FICO score are absolutely some of the most important components of your financial life.

If you intend to buy a home, or finance any large purchase, being sure that your credit report is error free and accurately reflects the level of risk associated with your financial history is the first step in ensuring you get the best possible interest rate and loan terms. 

But having an accurate credit report and associated FICO score can not only can affect your future plans for consumer purchases, but also the very basics in life. For example, most landlords use your credit report and FICO score as a determining factor in whether to lease you a home or apartment. In addition, many employers including the US Government use your credit history as a prime determinant in whether or not to hire a job applicant. If you are lucky enough to get a government job, many state and federal agencies use a credit check in conjunction with other methods to determine your suitability of a security clearance.

It is safe to say that monitoring your credit history and FICO score can have a huge effect on your long term plans, whatever they might be. Knowing this, what is the best way for an average Joe (or Jane) to ensure their credit is being accurately reported while also protecting themselves from identity theft?

Best Ways to Monitor and Protect Your Credit Rating:

Get your report free from all 3 credit bureaus (annually). The three main credit reporting companies are Equifax, Experian, and TransUnion. Each of these reports can be ordered for free on an annual basis by ordering your annual credit report. This service is free once per year, and should be taken advantage of to ensure that the data being reported is consistent and accurate.

Sign up for credit monitoring. Credit monitoring services are often offered by banks and other financial service companies for a small fee. This is a small price to pay when you factor in the cost of identity theft or erroneous information on a credit report. If you are considering these types of services, visit identity hawk for comprehensive identity theft protection. 

Be cautious. Many people suspect that identity thieves use high tech methods such as computer hacking or virus software to access your personal information. While this can sometimes be the case, the much more likely way that your information can be compromised is through old time methods such as intercepting mail or going through a home's garbage. One great way to prevent these types of potential information compromises is by using a crosscut shredder. If you don't already own a personal shredder, consider purchasing a crosscut shredder such as the Fellowes Powershred Cross-Cut Shredder or Aurora 8-Sheet Cross-Cut Paper/Credit Card Shredder.

Be prepared. Despite our best efforts, sometimes erroneous information gets reported to the credit bureaus, or worse, thieves steal your identity and cause untold harm to your credit and FICO scores. The best thing to do in these cases is to be prepared to fight back. Repairing your credit report can be a long and arduous process, but can be made much easier by having details about your accounts available in a convenient location. This should include bank and credit card phone numbers, the contact information for the credit bureaus listed above, as well as a number for your local police department.

For more information on protecting your credit rating, visit the Totally Money Blog Carnival.

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