Protect Your Credit and Identity, End the Year Right by Doing These 5 Things

While you’re taking down the tree, packing up the ornaments and figuring out how much weight you gained over the holiday season it’s important to remember that the year’s not over yet.  And, there are certain things that you should do before the ball drops in Times Square.  So, before you say goodbye to 2010 be sure to do the following…

Be Sure To Claim Your Free Credit Reports Before The Year Is Over – This should be on your list right next to “change the batteries in the smoke detectors.”  You are entitled to at least one free credit report every 12 months from any company that maintains it.  And, depending on the state you live in you may be entitled to additional free credit reports every 12 months or every calendar year.  Now is the time to claim your freebies if you haven’t done so already.  You can claim your Federally mandated free reports at www.annualcreditreport.com and state mandated freebies at each of the credit reporting agencies directly.  Your free reports do not “roll over” like our cell phone minutes so if you don’t claim them before January 1 then you’ve sacrificed your rights.  Over 150,000,000 free credit reports have been claimed since 2004.  Make sure you add to that number by claiming yours.

Check the Terms of Your Credit Card to See if They’ve Changed – This one would have sounded silly any year other than 2010. Credit card issuers were changing terms of credit card accounts furiously until February 22 of this year when the CARD Act made it more difficult for them to do so.  Now if they want to raise your rates or stick you with an annual fee they have to notify you 45 days in advance.  The problem…you are probably like the other 96% of cardholders who don’t read their notices.  Point being, your interest rate might be higher than you think.  Also, the CARD Act does not require any sort of advance notice by your card issuer when they lower your credit limits or even close your account.  Check your statements closely or call your issuer to confirm that you’ll enter 2011 with an open card with the same credit limit.  And, you might want to confirm the interest rate just to be on the safe side as well.

Pay Off Holiday Debts Before New Year’s Eve – You should seriously consider going online and paying off your holiday credit card debt well before you get your bill in the mail.  Knocking it out quickly is like ripping off a Band Aid.  It’s painful only for a moment, you’re happy you did it and you forget about it quickly.  This will keep the balances off of your credit reports and ensure that you enter 2011 without holiday debt, but you have to do this before the statement close date.

If You Opened Retail Cards Over the Holidays to Save 15% LEAVE THEM OPEN – I realize this sounds counter-intuitive especially considering that I just told you not to open retail cards in the first place.  Here’s the deal…the damage has already been done with the inquiries and the new accounts on your credit reports.  At the very least you should leverage the cards and get some value out of them in your credit scores.  Remember, the unused credit limits on retail cards are just as valuable to your scores as unused credit limits on Visa, MasterCard and Discover cards.  But, the cards have to be open for you to get the value.  Leave them open, don’t charge more than 10% of the credit limit and at least you’ll get something out of making the mistake of opening them.

Beware of Your January Mail – January mail is considered “high value” to identity thieves.  Why?  Think about what’s being mailed to you during the month; 1099s, W2s, interest statements from your banks, year-end statements from your brokerage and retirement accounts, and other highly sensitive tax related documents.  And what do all of these documents contain…your name, address and social security number.  Let’s just say mail theft is going to be way up in January and you don’t want your sensitive information lifted and then turned into new credit card accounts.  So what do you do?  “What can you do” is a better question.  You certainly can’t stop the mail but you can create a list of expected documents and quickly contact the company responsible for mailing it on February 1^st if the documents haven’t been delivered yet.  This doesn’t solve the problem but it gives you a jump on dealing with it.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and the author of the “credit rating” definition on Wikipedia.  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.  He has served as a credit expert witness in more than 70 cases and has been qualified to testify in both Federal and State court on the topic of consumer credit.

Categorised in: Credit Monitoring, Credit Report, Credit Score, Debt, Improving Credit, Money & Identity

This post was written by John Ulzheimer