Four Steps To Checking Your Credit Report

If there were a song about keeping yourself safe from financial scams, the refrain to that song would be “Check your credit report!” But practically speaking, what does that mean? How can that one piece of advice keep you safe from so much?

Though it sounds like an advanced financial maneuver, checking your credit report is easier than balancing your checkbook. All you have to do is get it, read it, report errors and stay on it. Let’s look at each step in detail:

1.) Get your credit report

There are three different credit reporting agencies: Equifax, TransUnion, and Experian. They share data, but each makes its own report. You’re entitled to one free report from each agency every year. If you know you’ve got a major purchase, like a car or house, coming up in the next year, you’ll want to check all three bureaus before you start shopping. This way, you can catch inaccuracies before lenders see your information and score. Otherwise, it makes sense to stagger them and view one report every four months. This puts the shortest amount of time between checks.

You can get your credit report for free at This is the only website approved by the Federal Trade Commission (FTC) for this purpose. Take care to avoid “imposter” websites operated by scammers. They may use similar-sounding website names or common misspellings in an attempt to trick you and get your personal information.

There are other situations under which you can get a free copy of your credit report. If you are denied credit, you can request a copy of the information that was used to make that determination provided you do so within 60 days. If you have been the victim of certain kinds of fraud, the service will also provide you with a free copy of your credit report in order to help you make it right. These checks will never hurt your credit score.

If you’ve requested your report online, it should be available immediately. You may need to answer a few questions to verify your identity. The service may ask if you shared an address with anyone else or about previous streets you’ve lived on. Once you answer these questions, you’ll get your credit report.

2.) Go over your report

With your credit report now in your hands, it’s time to look it over. There are three things you’ll want to look for. You want to find accounts that are open in your name and you want to see if there’s any collection activity. You’ll also want to take a look at the number and frequency of inquiries.

There are slight differences in the three reports, but each has a list of accounts. They may be broken down by type (mortgage, installment, revolving, and other) or listed by date. You’ll want to look through each one to make sure you recognize them. This can be a tricky task, as every store credit card you open and every installment loan you make is listed. If there are any accounts you don’t recognize, you’ll want to make a note of them and potentially contact the credit reporting agency. Look particularly for accounts going to PO Boxes or listed with addresses in other states.

“Negative items” include bankruptcies, accounts in collection or accounts reporting as past due. Such activity is another good place to check for fraud. If someone else opened an account in your name, they likely won’t be paying the bills. You’ll also want to look for inaccuracies that may be hurting your credit score. If there’s an account listed here that was discharged in bankruptcy, for example, you’ll want to make note of that, too.

The list of inquiries shows you the number of times someone has checked your credit. No one can do this without your permission, so if there are more inquiries than you remember, it could be a sign someone has stolen your identity. It might be worthwhile to put a freeze on an ability to open new accounts until you’ve gotten everything resolved.

3.) Report inaccuracies

Each reporting agency maintains a separate error reporting process, so you’ll have to report each error to the agency that made it. For basic errors, like address, name, or personal information, the agency can make those corrections with minimal trouble. For more serious errors, you’ll need to send a dispute letter.

The FTC has a template for a dispute letter available on its website. You can use that or you can draft your own. Either way, you’ll need to clearly identify the accounts or items you’re disputing. Where possible, use partial account numbers or other numerical information. You’ll also need to explain why you consider the item an error. Attach copies, but not originals, of documents that support your claim. Examples include police reports for stolen or lost wallets, bankruptcy orders that discharged a debt or letters from a lender indicating that an account was opened fraudulently.

Send your letter via certified mail. This costs a little more than a stamp, but you’ll get proof of receipt. This is important because the agency has 30 days to make a determination about your dispute. They’ll send your dispute to the information provider (the company that told the agency about the account or negative item).

If the reporting agency finds your claim to be correct, you can request that they send copies of the updated report to anyone who received your credit report in the last six months, and to any employer who pulled your credit report over the last two years. They’re also required to send you an updated copy with any new information in it.

4.) Stay on it

Checking your credit report periodically is the only way to keep yourself safe from identity theft and other modern crimes. If you need assistance, Destinations Credit Union is here to help.  Call, click, or stop by today.


College Credit

Credit Cards Can Be Your Angel (Indeed)

It’s a long-held myth that credit cards are the source of all evil because they nurture the inner shopaholic and help us incur debt. However, used responsibly, credit cards can actually be very helpful.
Credit cards are convenient. They can be used practically anytime and anywhere. They come with exclusive discounts, cash dollar rewards, online booking, etc. The perks vary with the source. Some health insurance companies have even issued their own brand of credit cards, covering free health exams every year.
To me, the biggest benefit of a credit card is having the ability to pay in installments for quality items that I could not otherwise afford. I’m not saying that a credit card should be used as a free ticket to buy everything you can’t afford to pay for outright. That’s a sure way into debt. But everyone has something special to them that is worth the interest payments.
For me, that was a quality camera for my travels. I love to travel, and a good camera is an essential accessory. While a trip is soon over, the photographs from the voyage will last forever.   They are tangible evidence of an unforgettable time that I can share with others. I made a choice to pay a little extra in interest over time for a good quality camera to capture those experiences.
Credit cards also have benefits aside from short-term gratification. In the long term, credit cards can help build credit history and raise credit scores. Of course, that’s only if you make your payments on time and DON’T charge up to the maximum limit. Having a good credit history will enable you to qualify for important loans in the future. After all, who would risk lending money to someone who never had a credit card or pattern of on-time payment behaviors in his life? In responsible hands, the credit card can serve as a symbol of growing up. A good credit history can enable you to take out a future business loan if you choose to go into business for yourself, or help you obtain a good mortgage loan on the home that you’ll get to enjoy with your family.
Though credit cards have both short- and long-term benefits, they need to be handled carefully. Everyone should have a budgeting plan for their credit card payments. Mine is a little trick I call the “debit-credit card.” I separate one-third of the money in my account and use that as my self-imposed credit limit. Once I’ve passed that limit, I don’t allow myself to use the credit card anymore during that month. I also separate a portion of my income to pay for the installments.
It’s true that if you use credit cards you’ll end up with a significantly smaller amount of your salary every month, since you are going to need to spend some of your income on credit card payments. Still, credit cards give you a flexibility you couldn’t get from cash. In case of any emergency, credit cards will be the first to help! So here’s my advice: Do own a credit card. And if you’re not completely certain that you can clear the balance each month, stick to the debit-credit card rule!

If you are looking for a great credit card, try a Destinations MasterCard.  In addition to the regular MasterCard, we have options for those just trying to establish credit or those who need to repair credit.  All offer low rates, no annual fees, and rewards points for every dollar spent.

5 Easy Steps for Credit Card Debt Freedom

Credit CardsApril is Financial Literacy Month, so Destinations Credit Union will provide several articles this month to help you financially.  This article deals with understanding how to reduce your credit card debt.

If your credit card spending has caused a stack of debt to pile up, it’s time to reverse the trend! With focus, discipline and patience, you can reduce and eliminate your credit card debt, no matter what the amount. Here are some tips…

  1. Create a detailed list of each debt, including the name of the debt, the amount, the current rate and the minimum payment due.
  2. Rank your list from the highest rate to lowest.
  3. Review your current household budget to determine how much you can put towards monthly debt repayment. If you are adding debt on a monthly basis, it means your discretionary income is actually negative. Start searching for items that you can reduce or eliminate from your budget. Keep in mind that your goal is to free up cash for debt reduction. While this will cause temporary discomfort, you’ll have freed up a tremendous amount of monthly cash flow when you get this debt repaid.
  4. Starting with the highest interest rate debt, apply 100% of the total new discretionary income (or the extra amount you’ve budgeted) to this account until it is repaid in full. Continue to pay the minimum amounts on all other cards. This is critical – don’t spread your monthly discretionary income across all debts equally.
  5. Once the highest interest card has been repaid in full, apply the original discretionary amount AND the amount from the paid off debt to the card that you ranked second one on your list. Repeat this pattern until each card has been paid in full.

And remember, this method can be used on ALL debt – not just credit cards.

 If you qualify, you may be able to consolidate all of your credit card debt on to a lower rate Destinations Credit Union MasterCard.  There are no balance transfer fees, so you may pay lower overall interest.  Then you can pay all of your discretionary income on to one credit card and simplify things.  The key, though, is not to continue using all of your credit cards.  Cut them up!

Keeping Up With Your Bills

Sometimes it can be difficult to keep up with your bills.  Maybe they have come in the mail and you put them aside to deal with later.  You get busy, and suddenly you’re late on a payment.

While everyone can slip once in a while and be late on a payment, doing so can affect your credit rating. The lower your credit rating, the more it will cost you in many ways.  So, you’re a good person, you don’t mean to pay your bills late.  How can you get a better handle on making sure you pay things on time?

Fortunately, technology has given us great choices when it comes to staying on top of bills.  In my opinion, the best way to keep on top of your bills is to use online bill payment. It doesn’t cost anything (at Destinations, it’s free if you pay at least one bill per month).  It’s easy to set up and use.  And, best of all, you can schedule your payments to go out when they are due…enter them as soon as you get the bill, then forget it.  You enter they payee information only once, then any time you want to pay, just click the payee then enter the amount and the date to pay the bill.  You can also schedule recurring payments if the amount doesn’t change.  Set up the payment to go out monthly on a specific day of the month. It’s safe – there are many layers of security to protect your account.

There are other ways to use technology as well.  You can generally go to the company website for payments such as your mortgage, BGE, phone, etc.  These sites permit you to set payments to come out of your account automatically.  The drawback to this method, is that it takes the control away from you and puts it in the hands of others.  Being the control freak that I am, I want to schedule the payment myself.  It is also more difficult to stop your payments if you need to.

If you are a true technophobe, you probably wont be reading this blog anyway.  For those who don’t want to pay online, look for simple low-tech ways to organize your bills.  Before the days of the internet, I used to have a desk calendar that I knew I would refer to every day.  I used to put my bills in the calendar for the day that I needed to write the check and mail it.

Whatever method you use, make sure to pay all of your bills on time, every time.  That will help maintain a high credit rating and save you money on loan interest, insurance rates, and more.

Debt: The Good, The Bad and The Ugly

Few of us have the luxury of living without any debt these days.  While my father-in-law paid cash for his house many years ago, and more recently paid cash for his car, I can’t imagine having the ability to do that.


The Good


Some debt can be good.  It helps build your credit rating if you are responsible about your borrowing.  Your credit score is used by employers, lenders, insurance companies and more.  A good credit score goes a long way in helping you throughout your life — lower rates on loans, lower deposits on purchases, lower insurance premiums, etc.


Debt can be considered “good debt” if it helps you achieve your goals (provided your goals are sound in the first place).  Borrowing to buy a house is normally good debt (barring the recent real estate “bubble”).  Homes generally appreciate over time and you build equity through your mortgage payments. Equity in your home can be used to improve and update it, making the value go up.  Eventually, chances are you can sell for more than you paid and get a decent return on your investment.  This is a long-term strategy, though, and probably won’t materialize if you buy and sell too quickly.


Debt can also be good if it helps you further your long-term goals in some other way.  For example, you may need a car to commute to your job, or you may need to borrow to fund your college education.  If the debt will pay off in the long run (such as a higher paying job), then it is good.


The Bad

Bad debt is when you accumulate debt to live beyond your means.  One example of bad debt might be buying a Mercedes when your budget can really only afford a Chevy.  Another might be running up credit cards for a new wardrobe when you don’t really need the clothes.  Even student loans can be bad debt if you don’t consider the risks/rewards of borrowing:  What are the job prospects in your chosen field? Are the salary levels for graduates in your field enough to pay for your loans (you’re probably not going to go to Harvard to be a kindergarten teacher!)?

The Ugly

Too many people rack up bad debt (or maybe a combination of good and bad) until they are drowning in payments.  The long-term consequences of this may be that you ruin your credit rating and you’ll pay more in the future (late fees, higher rates, etc.).

If you find yourself getting into too much bad debt or getting into a really ugly financial corner, Destinations Credit Union can help.  We offer members unlimited no cost one-on-one financial counseling through our partnership with Operation HOPE. Don’t wait to start digging out – make your future financial security a top priority.