Credit

Credit Housekeeping Before Year’s End

With the new year upon us, now is the time to get your credit house in order.  Here are some simple and free things you should do in order to kick-off 2012 on sounder financial footing.

Claim Your Free Credit Reports

Some people tell me I’m a broken record when I tell people to get their free credit reports.  I’d believe them if 96% of all free credit reports didn’t go unclaimed every year.  But, since we don’t do a good job of grabbing our freebie credit reports, I’m going to keep reminding you.

We all have the right to claim our credit reports every 12 months from any company that maintains them.  We can thank a Federal law called “FACTA” for this.  The problem is that these freebies don’t roll over, so if you don’t claim them, you lose them.  Before you finish reading this, open a new browser window and go to annualcreditreport.com and claim your credit reports from Equifax, Experian, and TransUnion.  You won’t need your credit card.

If you’ve already claimed your free credit reports in the past 12 months then, 1) good for you , and 2) you may still be entitled to additional free credit reports.  If you live in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, Puerto Rico or Vermont, then you’re entitled to an additional free credit report every year.  If you live in Georgia or Puerto Rico, you get two additional freebies.  You’ll have to request these additional credit reports directly from the credit bureaus.

Don’t let your free credit report rights expire!  It’s not their job to stick a free credit report in your mailbox when you’re not looking. The law requires them to be reactive, not proactive.

Opt Out

This is the credit card equivalent of the Do-Not-Call list.  You have the right to have your name removed from any credit bureau sourced list where you’d receive what’s referred to as a “firm” offer of credit or insurance.  This would be any list that has been pulled from a credit bureau after they’ve applied credit-related criteria such as, “All names in Atlanta with a FICO score above 650.”

You can opt out at optoutprescreen.com. Again, this is free, so you can leave your credit card in your wallet. This isn’t like getting a tattoo though, it’s not permanent.  You can opt back in at any time if you want to continue to receive preapproved credit card offers.  Now, this will reduce the amount of junk mail you receive, but it won’t eliminate it.  Opting out doesn’t prevent the credit bureaus (or anyone else) from selling your name and address.  It just prevents them from selling your name if it’s been prequalified based on your credit reports or scores.

Check Your Credit Card Interest Rates

You may or may not know this, but it’s possible that your credit card interest rate has been changed from a fixed interest rate to an adjustable interest rate card.  Why is this important?  It’s important because the CARD Act requires the card issuer to notify you 45 days before your rate is increased unless you’ve got an adjustable rate card and the index has gone up.  All adjustable credit card rates are tied to an index, like the prime rate, and if it goes up so does your card’s interest rate.  The prime rate has nowhere to go but up, so you may not know that your purchases could become more expensive to finance.

Get Your Free Credit Score

You might want to wait until a few weeks after the new year to do this, because you’re going to need all of that holiday shopping to show up on your credit reports.  The purpose is to see just what kind of damage you did with your holiday debt and new retail credit cards.  I’d suggest going to creditsesame.com or creditkarma.com for your free scores.  Again, you guessed it: You won’t need a credit card.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger forMint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.