Do you know your credit score?

To make things more complicated, paying your credit card balance in full every month might actually leave you with a lower score versus someone who never misses a payment, but always carries a balance.

Because of how important it is to your financial well-being, checking your credit report should be an annual exercise. With not much pain, you can get your report for free by calling or mailing in a form to one of the two main credit reporting agencies, TransUnion and Equifax. To get your credit score, or to get your credit report instantly online, you’ll have to pay.

But here’s something to keep in mind. When you check into your credit file, you might find yourself getting some phone calls from debt management companies. This happened to me a few years ago, with repeated automated calls providing an option to speak with a credit counsellor. They were obtrusive, frequent, and lasted for about three months.

I mentioned that to the few people I knew who had also looked at their files, and they recounted the same thing: they checked into their files and were swamped with telemarketing calls about debt management. Perhaps there is a high percentage of people are asking for their files because they know they have problems and they just want to know how bad those problems are.

For now, getting hammered by telemarketers might have to be a pill to swallow. Certainly if you feel your credit rating is poor, it makes sense to find out what is causing the drag on your creditworthiness so you can address it. But even if you’ve got your finances under control, you should still consider it to make sure the file reflects reality. Many people find errors, or perhaps red flags, which might suggest fraudulent activity.

If your score isn’t perfect, don’t sweat it. Having no debt is better than a high credit score. But if your debt situation is out of control, or if your identity has been compromised, checking into your file is the first step in setting things right.

Via: The Globe And Mail