Get Your Credit in Order Starting in 2017

A new year is a great inspiration for many people to take steps to improve themselves, whether it's through diet, exercise, or breaking bad habits. If you're looking to improve your financial health, you can start by getting your credit in order. 

Knowing where you initially stand is the first step on your journey, so take the time to get your credit report from one of the three major nationwide credit bureaus — Experian, Equifax, and TransUnion. Each of these bureaus is required by law to provide you a free credit report once every 12 months if you request it, according to AnnualCreditReport.com

Next, check the three reports for accuracy and completeness. The report will contain information such as your identifying information, your credit history, public records, and a list of inquiries into your report. The reports may also include your FICO credit score, which gives a snapshot of your credit worthiness to potential lenders. Your FICO score should be fairly consistent across the board, but there may be some variation because of how each bureau calculates the final number. Scores that are significantly different may mean the data the agency has collected is missing or incomplete. Are credit accounts you hold missing from one or more report? Are there any accounts you do not recognize, such as a department store line of credit? Now is the time to take stock of the report and ensure you're staying on top of all your credit obligations in a timely fashion. 

Now that you know where your credit stands, it's time to formulate a plan to make improvements. Maybe you have high balances on credit cards that you'd like to pay down? Or maybe you haven't used credit and could begin your history with a starter loan? Just know that changes to your credit happen gradually over a long time — good habits begun now may not pay off in a change to your credit score for 6 months to a year. But stick with it, and sure enough, you'll see the benefits in your credit score, which can open doors for you when you're ready to make a big purchase.

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