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Protecting your credit score is a good idea any time you’re planning to buy a home or refinance. Regardless of your circumstances, there are steps you can take to keep your credit score sound.
1. Monitor your credit report
Check your credit report to watch for identity theft and errors posted by creditors. The three major U.S. credit bureaus are Equifax®, Experian®, and TransUnion®. You can request a free report once a year from each of the credit bureaus at AnnualCreditReport.com.
To fact-check additional records, see the Consumer Financial Protection Bureau’s (CFPB) list of consumer reporting companies. These include a range of screeners that can influence your job options and home insurance costs, among other things. The list also includes information on disputing errors.
2. Watch your credit card limits
Check your credit card limits in case they’ve been lowered. Some credit companies cut credit limits without notice. This means impacted cardholders may be using a greater percentage of their available credit, which can hurt credit scores. As an example, if you used $1,000 of a $10,000 credit limit that dropped to $5,000, the percentage of your credit used has jumped from 10% to 20%. Learn more about the importance of these debt-to-credit ratios and other factors that may protect your credit score in our blog, “What Makes Up Your Credit Score.”
3. Contact lenders and creditors you can’t afford to pay
Contact creditors if you’ve fallen on difficult times, as they may offer options that can help protect your credit score.
4. Beware of scams and hackers
Protect your identity and finances online and offline. As a general practice, be suspicious of unsolicited offers, including mortgage offers, and don’t share sensitive information with an unverified source. Equifax also offers cybersecurity tips here, including keeping software updated on your cell phone, computer, tablet, etc. For more recommendations, read our blog on preventing identity theft. You can also sign up for scam alerts from the Federal Trade Commission here.
5. Freeze your credit and place alerts as needed
Put a security freeze on your credit files, if inclined. Freezes can prevent creditors from seeing your credit reports which may stop a scammer from opening an account in your name. Equifax, Experian, and TransUnion offer these for free, and they can be lifted when necessary. If you believe you’re an identity theft victim, the CFPB recommends freezes, fraud alerts, and active duty alerts. Fraud alerts allow creditors to access your credit report, but creditors must take measures to confirm they’re really working with you. Active duty alerts require creditors to take actions that protect military members’ identities.
Resources
For more information on protecting your credit score, see the resources below:
Tradenames and trademarks used in this blog post are the property of their respective owners. Nationstar Mortgage LLC d/b/a Mr. Cooper is not affiliated, associated, or sponsored by any of these owners. Use of these names and trademarks is not intended to and does not imply endorsement, but is for identification purposes only. Information provided does not necessarily represent the views of Mr. Cooper. Information is subject to change without notice.
