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You Earned an Excellent Credit Score—Now What?

You did all the right things. You made on-time payments for all your obligations. You kept low balances on revolving accounts. You diversified your credit, limited your applications for new credit, and kept old, unsecured accounts open. As a result, your credit score is solid. So how do you keep it?

Set up credit monitoring. From financial institutions, to credit card providers, to money management websites, there are several different sources for credit monitoring. The idea isn’t to obsess over your score, though. Once you’ve built an excellent score, use credit monitoring to alert you to unexpected information on your credit reports. This is credit monitoring’s most significant value.

Most of the time, erroneous data in your credit file comes from mistakes—whether it’s incorrectly processed information or someone else’s data misfiled with yours. These mistakes affect your score. So if you receive an update from a credit monitoring service that seems inaccurate, review your reports immediately. If your chosen credit monitoring service provides free access to your reports, take advantage of it. You can also access your credit reports for free once a year by visiting annualcreditreport.com or calling 877-322-8228.

Once you pinpoint the incorrect information in the credit file, the next step is to dispute the falsehoods. Disputes essentially require the reporting company to prove that the data they reported is legitimate. If they can’t prove that it accurately belongs to you, they must remove it from your reports.

Report disputes for the three major credit bureaus at:

Equifax: equifax.com/personal/credit-report-services/credit-dispute or 800-685-1111
Experian: experian.com/disputes or 888-397-3742 (888-EXPERIAN)
TransUnion: dispute.transunion.com or 888-909-8872

Sometimes, fraudulent data appears because a scammer accesses your existing accounts or steals your identity to open new accounts. If that’s the case, it’s wise to file disputes for all false information in your credit files.

And it’s an excellent idea to use the step-by-step guide outlined in detail at https://www.identitytheft.gov/#/Steps. Here is a brief overview:

What to do right away: Track and record these steps.

Step 1: Call the companies’ fraud departments where bogus charges occurred and:

    • Freeze legitimate accounts. Demand documentation for any questionable charges or activity.
    • Cancel any new account opening you did not open. Request documentation for this fraudulent account.

Step 2: Place a free, one-year fraud alert with one of the three credit bureaus listed above. The company you notify must notify the other two.

Step 3: Report identity theft to the FTC online at https://reportfraud.ftc.gov/#/assistant or https://www.identitytheft.gov/#/assistant, or call 877-438-4338.

Step 4: You may choose to file a police report with your local office. Inform them someone stole your identity, you need to file a report, and you need a copy of the report.

What to do next: Repair the damage. Track and record all communications and efforts.

    • Review all of your other accounts and remove bogus charges from your accounts.
    • Request your free annual credit report from the bureaus themselves or from annualcreditreport.com. Note: Identity theft victims are entitled to additional free credit reports.
    • Review your credit reports often and correct as necessary.
    • Consider adding an extended fraud alert or credit freeze.

Finally:

    • Change all account passwords.
    • Run a virus scan on your computers.
    • If you have identity theft insurance, file a claim.

Build your emergency savings. The single-largest component of your score is on-time payment history, so it’s wise to think ahead. Currently, you may accumulate timely payment after timely payment. However, experts recommend six months of your regular income in an emergency savings to keep your payment history rock solid no matter what life throws. This way, if a significant financial challenge arose, such as a job loss or medical emergency, you have a means to continue punctual payments to debtors.

In closing, keep an eye on your score and continue to stay educated on related financial topics so that you may take advantage of the rewards that come with good credit.

Resources: balancepro.org, ftc.gov, idenititytheft.gov

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