At this time of year, when all of us are making resolutions about our time and fitness, to get organized or get in shape, let’s put our credit reports on that list of things we want to shape up. When we pay attention to what’s on our credit reports and organize our purchasing habits we make it a heck of a lot easier to protect ourselves from identity theft.
One of my friends recently asked me to help her look over her credit report. She’d seen some unusual activity on one of her credit cards and was concerned. After all, one of the most common signs that someone has stolen your identity are those pesky unauthorized charges that pop up on our statements.
Sometimes it’s pretty easy to detect those charges. If you live in Western Washington and it appears you purchased Spike the Ultra Dinosaur from a toy store in Kansas City, that’s going to stand out. But sometimes it’s not that easy to detect.
When my friend and I sat down to look at her credit report and account statements, I realized that it was going to take a lot longer than expected. She hadn’t looked at her credit report in a couple of years. Her lack of familiarity with what should be on there made it more difficult to detect what shouldn’t. Had she really used that debit card for $3 worth of gasoline in Seattle? Did she actually use a department store credit card 5 months previous? She didn’t think she’d used the store card since she opened it just for the discount, but she couldn’t be sure without going home and pulling all her statements.
In my friend’s defense, I don’t know anyone who could tell you from memory what they’d purchased several months back. And this is where reviewing your credit gets trickier than it needs to be. Here are some simple steps you can take to make your credit report error free, and easy to review in the event of identity theft.
Review Your Statements Throughout the Month: Some may call it paranoia, but I check my statements online once a week. While you can check them by phone, consider signing up for online access to your statements and check them every so often. Unauthorized charges are more likely to stand out in your memory if you’re looking at transactions that occurred in the last few days, rather than weeks.
Evaluate Your Credit Cards: How many cards do you have? Are you actually using all of them? Don’t cancel everything at once and wreak havoc on your credit score, but if you’ve got 10 department store credit cards and the usual Visa, MasterCard, and Amex, decide which cards you regularly use so that you know where you should actually see your purchases and consider whether or not you need all the department store cards.
Designate Cards by Expense: Travel for work? Only buy online? If you designate a card for specific types of expenses, it makes purchasing activity on your statements easier to monitor overall.
Remove Inaccurate Data From Your Credit Report: What to look for: Debts you’ve already paid off, cards you previously canceled, mortgage or other loans (even if their current) that don’t belong to you or inaccurate balance highs can all make your credit report difficult to review in the event your identity is stolen, and hurt your score.
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