Excellent Credit Requires Your Own Due Diligence

If you are shopping for a new credit card or want to take advantage of one of some of the card promotions that are going on, you should know that if your credit is not considered “excellent”, you may end up spending way more time and money than you ever bargained for simply to get access to one.

Sure, it’s true that having a credit card can be an excellent tool to build or rebuild a credit history but just getting access to one with a decent interest rate these days is surprisingly difficult. Before you even start shopping for a new card, you’ll have to do your own due diligence (homework) to find out where your current credit score stands. Never assume anything with your credit score. Especially considering the effect of the recent credit and financial crisis, there is a good chance your score is not as high as you think it is. In fact, a few months back, a score of 700 was considered top-notch. Now, most lenders are looking for a score of at least 730 or higher for top tiered credit access.

If you’re unaware of your credit score status, you can do further damage by applying for cards you aren’t eligible to receive anyway. You don’t want to shoot yourself in the foot in this manner. Getting your score is relatively simple and you will be charged a nominal fee each time you access it, over and above the free report that you’re entitled to once a year. But there is much more to a simple credit score than just seeing some numbers on a page.

Here are a few steps and tips for staying on top of your credit score status and doing what you can to improve on it:

Choose the credit reporting agency from where you wish to see your score. Both Equifax and Experian reports can be accessed online but remember in order to see your credit score, you must specify and pay for the score. Otherwise you will only receive copies of the credit history under your name and not the score as well.

After you have ordered and received your report, take a look at your score and see if it is close to what you anticipated. Regardless of whether or not your score is what you thought it was, you now need to take the time to understand what it means. You need to go line by line through all of the information and the entire report. Keep a piece of paper handy as well as a yellow highlighter. You’ll want to mark down any and all discrepancies or items that don’t look familiar or simply just don’t look right to you. Check all your accounts and be sure your creditors have accurately reported back all correct information completely. Not only are your creditors capable of frequently making mistakes, the credit bureaus themselves are also capable of entering wrong information. Check outstanding balances, open accounts, closed accounts, and current status of each line item carefully. Be sure your personal information is also completely accurate as well.

On each credit report, there will be instructions on what you have to do to file a report to correct errors with the credit bureau. Follow these instructions and complete the online form or the printed form and return it to the credit bureau. The bureau is then obligated to investigate your claims and if unable to verify as true, Federal Law states that incorrect information must be removed completely from your report. Sometimes even a small mistake can negatively impact your credit score.

After you receive word that the investigation has been completed, obtain another copy to review for accuracy. If your credit score is on par with top-tier credit (730 or higher), you can now actively start researching and comparing the best cards online. You need to stay on top of your credit score status more than ever.  Credit scores have never been more important than they are right now.  Keep in mind that consumers have the right (by law) to request a copy of their report for up to 60 days after being denied credit. Request a copy every 6-12 months and be sure it accurately and completely reflects your credit status and personal information.

After verifying your credit score, researching some of the better credit card options out there, you should apply for only one or two cards simultaneously. It’s usually best to apply for one card at a time and infrequently as well, but if you insist on applying for more than one, don’t apply for more than 2 cards at any one time.  When creditors pull your credit report, they do not want to see too many applications for any kind of credit.

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This entry was posted on Wednesday, August 26th, 2009 at 7:20 am and is filed under Card Security, New Card Offers, Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.