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Spring Cleaning Ideas for Your Credit

It's wise to keep your credit in good shape throughout the year. But a spring cleaning urge might be the perfect motivation to give your credit some extra attention.

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There's something about springtime that can inspire you to want to clean things up and put them in order. You might have household chores on your spring cleaning to-do list, like deep cleaning, purging unused items, or some much needed organizing. Yet it can be a good idea look at cleaning up financial matters—and credit in particular—during the spring season too.

Keeping your credit in the best shape possible requires ongoing effort. However, the four credit-related spring cleaning ideas below could be a great place to start if you want to earn or maintain higher FICO® Scores over time.

Credit Cleaning Idea #1: Dust Off Your Credit Reports

FICO® Scores are based on information that appears on your credit reports from the three major credit reporting agencies—Equifax, TransUnion, and Experian. This information has the potential to impact your FICO Scores for the positive or the negative. Therefore, it's wise to review your reports often, and credit spring cleaning plans can be a perfect reason to get started.

Per the Fair Credit Reporting Act (FCRA), you can access each of your credit reports for free once every 12 months. It's easy to claim these free reports online at AnnualCreditReport.com. All three credit reporting agencies are also offering free weekly online credit reports to consumers as well during the COVID-19 pandemic.

Credit Cleaning Idea #2: Clean Up Credit Errors

After downloading your credit report from each major credit reporting agency, you'll want to go through each one with care. Make a note of any information that you don't recognize or seems suspicious. You may also want to search for potentially negative credit details that might be holding your FICO® Scores back from reaching a higher level.

The good news is that if you do find mistakes on your credit report, the FCRA empowers you to do something about them. You can attempt to clean up errors on your credit report by filing a dispute with the appropriate credit reporting agency. This sample dispute letter could help.

It's also your right to contact the company that provided the incorrect information to the credit reporting agency in the first place. These companies (called data furnishers) could be lenders, collection agencies, or other types of creditors. Per the FCRA, both the credit reporting agencies and data furnishers must remove information that they verify to be inaccurate on your credit report when you bring it to their attention via the dispute process. Information verified as accurate, however, will remain.

When you send a dispute, you may want to include any proof you have to support your claim. A copy of your credit report with the item you disagree with highlighted or circled may also be helpful. Finally, the FTC recommends sending credit dispute letters via certified mail with return receipt requested.

Credit Cleaning Idea #3: Reduce Your Credit Card Debt

Credit utilization is a term that describes the percentage of your available credit that you're using. This measurement is an important factor with a meaningful influence on 30% of your FICO® Score. When you reduce your credit utilization—especially on revolving accounts like credit cards—it has the potential to increase your FICO Scores.

Paying down your credit card debt can be an effective way to lower your credit utilization rate. (A credit limit increase might help too.) Lowering credit card debt is also a smart task to add to your credit spring cleaning list since carrying less debt typically equates to paying less interest rate fees on your credit cards.

Credit Cleaning Idea #4: Organize Your Credit-Building Plan

You need a solid plan to build good credit over time. Establishing positive credit history, and doing so with a variety of account types, could be smart steps to add to your credit-building plan for two reasons:

With payment history, it's important to focus on making on-time payments. Organizing a system that helps you keep your credit obligations paid on time is a wise way to protect your credit from damage. Automatic payments, bill reminders, and budgeting systems are examples of tools that might make remembering to pay on time a little easier to manage.

Having a good mixture of account types on your credit report (e.g., installment accounts, revolving accounts, etc.) might also benefit your FICO® Scores. But it's important to proceed with caution before you start opening new accounts.

A new positive account won't erase any negative history that's on your credit report. Most negative items remain on your credit report for seven years. Furthermore, opening a new account might have a somewhat negative score impact, both when a new hard inquiry appears on your credit report and if the reporting of a newly opened account reduces the average age of your credit accounts (aka your length of credit history).

Having good credit management practices is important all year long. But if you haven't been giving your credit as much attention as you should lately, consider using the spring cleaning urge to start down a better path.

Michelle Black

Michelle Black, Founder of CreditWriter.com is a leading credit expert, financial writer, and speaker with nearly two decades of experience. Her work has been featured with major outlets such as Forbes, Reader's Digest, and U.S. News and World Report.