As we come out of winter’s hibernation, we also take notice of those areas and items so easy to brush aside in the winter months that now need attention – painting the fence, trimming the hedges, cleaning the windows, washing the salt and soot off the car, etc.
A thorough spring cleaning is an annual ritual for many people as spring time signals a new beginning and fresh start. It is also an ideal time to check on your credit, clean up any potential reporting errors and present the most attractive view of creditworthiness should you plan on applying for credit in the next couple of months.
Several credit related “spring cleaning” tips:
- Get a copy of your credit report and check to ensure all information being reported is accurate and up to date. If you find errors, address them immediately using the dispute resolution processes managed by the credit reporting agencies. They have 30 days to investigate and resolve. Any changes made to your report will be considered in the score calculation the next time your report and score is requested.
- Be careful about building up big balances on your credit cards. Going on a spring time buying binge (new clothes, summer vacation deposits, airline tickets, etc.) can make your look more indebted causing you to lose points and make your profile look more risky to lenders.
- Pay down credit account balances – especially revolving type credit (credit cards, etc.) if you have the income capacity to do so. This action can potentially increase your score and save you money from interest rate fees.
- Only apply for credit if needed. While it may be tempting to apply for that home improvement credit card to instantly save 10% on all your spring cleaning supplies and tools, it could potentially have a negative impact on your credit score – affecting access to and cost of new credit you may be seeking in the near term.
It has been a long winter/late spring for many of us, so get out there and dust off the lingering effects of winter to pave the way for a great summer season.
Tom Quinn is the Vice President of Business Development for myFICO, and has over 20 years of experience working with consumers, regulators and lenders and regarding credit related questions and initiatives.