April 16th, 2012
Spring Cleaning Your Credit & Finances
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Ah, Spring! Flowers are blooming, birds are chirping, allergies are in full-swing, and many of us have cleaning on the brain. While it’s a good idea to get out the broom and mop and get your home dust-free, have you spent some time cleaning up your financial house yet?
Here are some strategies for making a clean-sweep of your credit and your finances this Spring.
Correct Any Credit Report Errors
Your credit report is long and data-rich. Even if you’ve checked it before, you may have missed an error that could damage your credit score, especially considering that as many as 25 percent of credit reports contain serious errors. The most common credit report errors include outdated personal information, mistaken or fraudulent accounts and incorrect account details.
Get a free copy of your credit report from each of the three bureaus (Equifax, Experian and TransUnion) at AnnualCreditReport.com. Comb your credit reports for the most common credit report errors, and check all three bureaus, because errors can vary from bureau to bureau. If you spot an error, follow the guidelines in the article, “How to Dispute an Error on Your Credit Report.” After you’ve successfully disputed an error, check your free credit score on Credit Karma to see how the update affected your credit health.
Review Your Insurance Rates
The auto insurance rate you’ve been paying for the past two years may not be the best deal you can get now. Take a look at all of your insurance policies, including auto, health, homeowner’s and life insurance. Shop around to make sure you’re getting the best deal possible. You might be able to save a couple hundred dollars a year just by switching an insurance plan or two. In fact, Credit Karma does the work for you under “My Savings.” You can find personalized savings recommendations on auto and life insurance.
Consider a Mortgage Refinance
There are a couple of good reasons for refinancing your mortgage: to lower your monthly payments or reduce your overall interest payment. Now that mortgage rates are at an all-time low, it could be a good time to consider a refinance. However, remember that there are closing costs that come with refinancing; it’s only worth it if you’ll be staying in your home long enough to recoup that cost. According to this article, that could take about a year, on average.
You can determine whether or not it’s a good idea to refinance your mortgage using this calculator from Bankrate. Also remember that a good credit score can help you in the refinancing process. If your credit has improved since you were first approved for your mortgage, you’ll stand a good chance of being approved for a refinance. If not, spend some time building your credit before the refinance.
Clean Up Credit Card Debt
The average American has $5,871 in outstanding credit card debt, according to the latest Credit Karma data. If you find yourself struggling to pay back more credit card debt that you can handle, consider transferring your current debt to a balance transfer card. Balance transfer credit cards can help you save on your credit card debt with an introductory interest rate of 0 percent for six to 21 months. Just keep in mind that there will be a balance transfer fee, usually three to five percent of the transferred balance. Also, you’ll need good to excellent credit to be approved for most balance transfer cards.
If you think a balance transfer card might be right for you, check out this guide on “How to Choose the Best Balance Transfer Card.” And take a look at Credit Karma’s recommended balance transfer cards at the end of this post.
Bottom Line: These are a few suggestions to get you started cleaning up your credit and finances. You can find more ways to save and improve your overall financial life in the article, “Spring Cleaning: Forming New Money-Saving Habits.”
Disclaimer: Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the card issuer. This site may be compensated through some of the included links.