Reviewing Your Credit Report

Yesterday we reviewed several reasons to review your credit report. I also noted where to obtain your free credit reports.

Another reason to review your reports is regarding closed accounts and how they were closed.

Let's say for example your were occasionally 30 days behind on a credit card bill. This has happened to many of us in today's economy. The important fact you have to remember is how your final payment is posted.

If you made your final payment to close out the account, but you were still 30 days behind on the bill it will still show 30 days late.

How is this possible? Well you did make your final payment, but the previous payment was late. So if you owe $200 on a credit card and you are 30 days behind on your minimum payment of say $50. Your best option is to pay something close to paying off credit card, say $175.

Then when you make your final payment of $25 plus interest you will at least close the account current.

This is huge when factoring your credit score since now the account is current versus be R2, which means 30 days behind.

LESSON: If your behind on credit card get current before making final payment on card or loan. This little fact can increase or decrease your credit score.