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Your Credit Report and the Importance Of Keeping Good Financial Records
You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services.
They all make the same claims:
* Credit problems? No problem!
* We can erase your bad credit — 100% guaranteed.
* Create a new credit identity — legally.
* We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!
Do yourself a favor and save some money, too. Don't believe these promises. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
In order to save money, budget for the unknown, and keep from going into debt, you'll have a very difficult time knowing what to estimate for these expenses if you don't keep good records. Record-keeping may be one of duller ways to spend a rainy Saturday, but it really pays big dividends when you need quick access to important financial information.
Personally speaking, I'm pleased to be able to say that I can find the receipt for any purchase - no matter how small - for the last year and bigger ones for much longer. This practice may not be the most of fun of activities, but I am organized. Having a good system that works for you for keeping records such as policies, receipts, and such can save time, money, and frustration.
How can you accomplish this feat? I'll tell you: Any way you want. A number of perfectly good record-keeping methods and products are available, so pick one you like - or choose parts of various ones and put them together. Here are a few guidelines to offer:
1. Keep all your stuff in the same place or general area, such as a desk, cabinet, or closet.
No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA).
2. Have some way of breaking down the information by subject: bank statements separate from investment statements, credit card statements separate from utility bills, and so on.
3. If you have a spouse or partner, decide who is responsible for keeping records. It's okay if you each want to do your own. But someone has to assume responsibility - or it will be left to the budget elves, who aren't too reliable.
4. Try to establish a routine to update things - once a week, once a month - it doesn't matter as long as you have a set schedule.
5. Get a safe-deposit box for your irreplaceable papers. They don't cost a lot of money and the expense is tax-deductible if you itemize your deductions on your tax return. A fireproof safe may do just fine. Include documents such as car/motorcycle titles; marriage, divorce, and birth certificates; wills; savings bonds; and so on.
6. Once a year or so, clear out old or outdated information like old policies or tax returns more than seven years old. Keep anything that relates to an item with an extended life (like a TV), including the receipt, warranty, and owner's manual.
About the Author: About The Author
Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on Credit Repair and Debt Consolidation and is president of Information Organizers, LLC.