Spring­time is as good of a time to clean up your finances, as well as your home and yard.  One piece that often gets over­looked even after exten­sive finan­cial and invest­ment plan­ning, is your cred­it report and score.  These are impor­tant pieces of your finan­cial pic­ture that can ben­e­fit from occa­sion­al mon­i­tor­ing.

You are enti­tled to a free cred­it report from the three report­ing agen­cies once a year and can obtain this infor­ma­tion at www.annualcreditreport.com.  Here you will see your pay­ment accounts and your sta­tus with each.  Elec­tric bills, park­ing tick­ets, cred­it card bills, home mort­gages, and more show up on this report.   Use this to check that no one has report­ed a late pay­ment or unpaid bal­ance this is incor­rect.  If some­thing doesn’t look famil­iar, check it out to make sure some­one hasn’t opened a cred­it account in your name!

Fair Isaac Cor­po­ra­tion takes this infor­ma­tion from the three agen­cies and cre­ates your cred­it score or FICO score, which ranges from 300 to 850.  This num­ber will allow cred­it card com­pa­nies, auto­mo­bile lenders, and mort­gage lenders to decide how much to lend you and at what inter­est rate.  The score is based on a com­bi­na­tion of your pay­ment his­to­ry, the amounts you owe, the length of your cred­it his­to­ry, how many accounts you have recent­ly opened, and the types of cred­it avail­able to you.

The best rates on a loan or cred­it card are giv­en to scores over 700, so it is impor­tant to know where you fall.  Before apply­ing for a loan, check your cred­it report and score.  If some­thing is incor­rect, sub­mit it to the agency for inves­ti­ga­tion and get the issue cor­rect­ed BEFORE apply­ing for the cred­it.

If you are not going to be shop­ping for cred­it any­time soon, the annu­al check of the report should be okay for you, how­ev­er get­ting your actu­al FICO score from www.MyFico.com is impor­tant if you are look­ing for a new car or home.

As a gen­er­al rule, pay­ing at least your min­i­mum pay­ment, on time, and restrict­ing your cred­it bal­ances to less than 1/3rd of the cred­it avail­able to you, will keep your score high and your inter­est rates low.  This means more mon­ey in your pock­et and con­tin­ued finan­cial pros­per­i­ty.