NASHVILLE – March is recognized by credit and financial professionals as National Credit Education Month. To raise awareness in the Volunteer State about the importance of establishing and maintaining good credit, the Tennessee Department of Commerce & Insurance’s (TDCI) Division of Regulatory Boards wants consumers to conduct a “credit check-up” to improve their financial knowledge and awareness.

TDCI oversees the licensure of credit and debt collection professionals through the Collection Service Board, Debt Management Program and the Credit Services Business registration program.

“During National Credit Education Month, Tennesseans should take the time to conduct an annual review of their credit score, correct any incorrect information on their credit reports and focus on establishing good financial habits for the future,” said TDCI Assistant Commissioner for Regulatory Boards Alex Martin.

For many, reviewing credit reports for inaccurate information and working to correct any inaccurate information can be intimidating. By following some basic steps, consumers can improve their financial education and alleviate future credit concerns.

1. Conduct an annual review of your credit score. There are three (3) nationwide credit reporting agencies (CRAs): Equifax, TransUnion and Experian. You should review your report from each agency annually. These annual reports are free. It is important to review all three (3) reports because they may not all contain the same account information due to lenders and creditors having various reporting practices. You can obtain a copy of all three reports here: https://www.annualcreditreport.com/index.action.
2. Review all your personal data on the credit reports. Make sure that your name is spelled correctly, your address information is current and your Social Security number and date of birth are correct. If these items are incorrect it can cause problems when someone pulls a copy of your credit report. Ensuring that these items are correct will also help to reduce your risk of being a victim of identity theft.
3. Review your credit references. These will be your existing and historical (paid) accounts and their payment history. Review the accounts for accuracy, including the account status (open or closed), account balances and the age of the account. Keep in mind the reports may be 30 to 60 days behind depending on how often a creditor provides information to a credit reporting agency. If you discover that there are errors, you can dispute the information. Most credit reports will contain the specific instructions for how to perform corrections and/or disputes, but it is important to remember that a credit bureau can only remove information that is inaccurate, not information that is true and is simply negatively impacting your credit score.
4. Understand the value of good credit and a good credit score. Poor credit history can result in being unable to obtain loans, find housing, acquire services or even gain employment. In addition, poor credit can result in higher interest rates which leads to paying hundreds or thousands of dollars more in interest alone. Good credit allows lenders to have more confidence in your ability to pay back what you have borrowed in a timely manner.

Think maintaining a good credit score is impossible? Think again. These simple steps can put you on the road to maintaining good credit for a lifetime.

• Pay your bills on time. If you are having financial difficulties, contact your creditors for possible assistance options or programs.
• Live beneath your means. Just because you can afford that additional monthly payment does not mean it is a good choice. Save first, think ahead and have an emergency plan in place.
• Do not run up high credit card debt. Your credit score is partially determined by the amount you owe on your accounts in comparison to your available credit limit. A general rule is to try and payoff the balance each month. If you cannot do that, try to maintain a balance that is 50% or less than your credit limit. For example, if your credit limit is $1,000, try to maintain a balance of $500 or less.
• Do not borrow often. When you apply for a new credit or service, an inquiry into your credit history is done. These inquires can negatively impact your credit score, especially when they are done frequently. If you are ready to make a purchase that requires a loan, such as a buying a vehicle, check with your bank or credit union first about a loan pre-approval. A pre-approval will give you an idea of what you are eligible for with minimal impact to your credit score. If this is not possible, ask the vendor you are working with not to send your application to multiple lenders so there are not multiple inquiries on your credit report.
• Take advantage of free resources to track your credit score. Many credit cards offer this as one of their perks and there are many companies that offer this service for free.
• The CFPB (Consumer Finance Protection Bureau) is a good resource for all types of consumer issues and education. They have a section on their website that deals with credit reporting and credit scores in more depth. It is an excellent resource and can be found at: https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/.

###