You bring your car to the mechanic regularly for a check-up. You go to the doctor regularly for a check-up. You go to the dentist regularly for a check-up. Whether our car, our body, or our teeth, we know the importance of periodically reviewing those important aspects of our life because we know that if we don't have them checked regularly, they might deteriorate and become unavailable to us.
Your credit is exactly the same way. Like your car or your body, your credit is something that needs a regular review so that it keeps getting healthier and doesn't "deteriorate" on you. I advise that you check your credit quarterly (every three months -- March, June, September and December). The first couple of times you do it, it might take a little longer to get into a rhythm but if you do stick to it every quarter, you'll find that within a couple of quarters, it will only take a few minutes in total. (I think it's well worth investing a few hours the first couple of times to make future quarters that much faster!)
Since we're near the very end of the first quarter of 2013, this is a great time for you to check on your credit. Here's what to do on a quarterly check-up:
• Go to www.annualcreditreport.com to access a credit report instantly. Print it and review it carefully.
• Check for errors, including information that isn't correct, information that doesn't belong to you (perhaps someone else's information made its way onto your report), and information that is missing. Dispute the errors and alert the credit reporting agencies.
• Clear up any overdue payments. Make a plan to pay these items as quickly as possible.
• Identify a couple of areas that you can improve and set a goal to improve those areas within the upcoming quarter, before your next check-up. Just choose a couple of areas and write these down on a little index card or sticky note and put them where you can see them regularly to remind yourself of your goals.
• Keep your credit reports in a binder and add your new reports to the binder each quarter.
That's it! Pretty simple! And believe me, if you do it every quarter it will get simpler and simpler. Some of my clients I have coached find that the first time they do this, it might take them a few hours to go through their reports and it might take a few days of consistent work to dispute the incorrect items... but by the third (or sometimes even the second!) quarter check-up, it only takes a few minutes.