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Just like an annual medical check-up, you should check your credit health regularly. Unlike a trip to the doctor, however, you can check your credit for free.


Know What’s In Your Report 

The Fair Credit Reporting Act (FCRA) requires that credit reporting companies provide a free copy of your credit report every 12 months. To get your free copy, go to You can request a copy from each company at the same time and get them all at once, or you can spread them out over the year by requesting one every four months, each time from a different company until you’ve gotten all three. You can call or go online to request your copy:


  • Equifax:1-800-685-1111;
  • Experian: 1-888-397-3742;
  • TransUnion: 1-800-916-8800;

Check Your Credit Report for Accuracy

Once you receive your copy, review it to ensure that all information is accurate. In your report, you will find:
  • Personal identifying information (including your name, address, date of birth, social security number, etc.)
  • Public records and collection items (such as bankruptcies, liens, or defaults)
  • Your trade lines (open, closed, installment, and revolving accounts)
  • Inquiries (the requests sent by businesses for your credit report when you apply for a loan)
Report Errors or Suspected Fraudulent Activity Immediately
If you discover any errors or suspect fraudulent activity, notify the credit reporting company as well as the applicable creditor in writing through email, certified mail, or online:

First, tell the credit reporting agency what information you believe is inaccurate.
  • The credit bureau must investigate the item(s) in question – usually within 30 days – unless they consider your dispute frivolous.
  • Clearly identify each item in your report you dispute.
  • Include copies (NOT originals)
  • State the facts and explain why you dispute the information.
  • Request deletion or correction.
  • Send your letter by certified mail, return receipt requested, so you can document that the credit bureau received your correspondence.
  • Keep copies of your dispute letter and enclosures.

 Second, write to the appropriate creditor or other information provider, explaining that you are disputing the information provided to the bureau.

  • Again, include copies of documents that support your position. Many providers specify an address for disputes.
  • If the provider again reports the same information to a bureau, it must include a notice of your dispute.
  • Request that the provider copy you on correspondence they send to the bureau.
  • Expect this process to take between 30 and 90 days.

Know What Makes Up Your Credit Score
Your credit score is comprised of five categories:

Payment History determines 35% of your score
  • This includes all trade lines: installment loans, credit cards and other revolving credit lines, retail accounts, finance company accounts
  • This also includes both open and closed accounts that area showing on your credit report.

Amounts Owed determine 30% of your score
  • This includes the amount owed on all accounts in the report
  • How many accounts have balances
  • How much of the installment loan amounts is still owed, compared with the original loan amount
  • How much of the total credit line is being used and other "revolving" credit accounts

New Credit determines 10% of your score
  • How many new accounts you have
  • How many new accounts have been opened in a period of time
  • How many recent inquiries you have

Credit Mix determines 10% of your credit score
  • What types of credit accounts you have
  • How many of each type of credit accounts you have (installment, revolving, etc.)

Length of Credit History determines 15% of your score
  • Your score may consider the time that has passed since you opened a new credit account.
  • Closing an account doesn’t make it go away; it will still be included on your report and as part of your credit history.

Know Your Debt-to Income Ratio
Your debt-to-income ratio, or DTI, is another consideration that lenders make. It also helps you set a benchmark for how much debt you can afford in relation to your income.

Your DTI ratio is the portion of your gross monthly income that is used to pay for your recurring monthly payments. For example, if your gross monthly salary is $2,000, and your monthly payments are $1,200, your debt-to-income ratio is 60%. Most lenders would consider a DTI of 35% to be fairly manageable. The lower the DTI ratio, the more favorably it is viewed by most lenders.

Work through an example together. Have audience give you the amounts to use as an example.

Practice These Tips for Building Stronger Credit Health:
  1. Pay your loans on time. Before any other expenses are paid, pay your creditors. One of the first things a lender will look for is how well you’ve paid other lenders on time.

  2. Pay more than the minimum on your credit cards. Paying more than the minimum not only helps you pay your credit card debt off sooner, it can save you a lot in interest.

  3. Don’t max your credit cards. The more capacity, or available balance, you have on your credit cards, the more it can help your credit score. Having credit cards with available credit can show that your accounts are being managed responsibly.

  4. Take into consideration what your new debt-to-income ratio would be when deciding whether to apply for more credit.

  5. Let your accounts age. Don’t close paid off credit cards unless there’s a good reason to do so, such as an annual fee or the temptation to charge them up again. It’s good to pay off installment loans early, but let them age a bit first. The longer you have credit, the better it is for your credit score.

  6. Refrain from overextending yourself. Only apply for more credit when you truly have a need for it. Also, consider other methods of obtaining the money you need, such as refinancing an existing loan or building a savings plan to generate the money over time.

To learn more about credit reports, scores, and what to look for, visit the Federal Trade Commission’s consumer information site,, or