Your credit score is costing you money right now. Or saving you money. You just don’t know which because you haven’t checked it.
Here’s a number that will shock you: 73% of credit reports contain errors. And those errors could be costing you $300 monthly on a mortgage, $50 monthly on car insurance, or preventing you from getting approved for loans entirely.
Welcome back to The Clever Wallet’s Money Moves series. You’ve built your emergency fund (Move #1), found hidden money (Moves #2-3), and automated your savings (Move #4). Now it’s time to check the three-digit number that determines how much everything costs.
This is the Credit Score Check Money Move, and it takes 10 minutes but could save you tens of thousands over your lifetime.
The Money Move: Check Your Credit Report and Fix Errors Immediately
Your credit score affects:
- Mortgage interest rates (difference of $300/month on a $300K home)
- Car loan rates (difference of $50/month on a $30K car)
- Insurance premiums (difference of $100/month in some states)
- Credit card approval and limits
- Apartment rental approval
- Some job applications
One error on your credit report could cost you $450+ monthly. That’s $5,400 annually. Over 30 years? $162,000 lost to a mistake.
Checking takes 10 minutes. Fixing errors takes 30 days. The return on investment is massive.
The Hidden Credit Report Error Costing You Thousands
Meet David. He’s 32, makes $75,000 annually, pays his bills on time, and considers himself financially responsible. He’s never checked his credit report because “I don’t have bad credit.”
David decides to buy his first home. Pre-approval time. The mortgage lender pulls his credit: Score of 642.
David is shocked. He expected 720+. With a 642 score:
- Interest rate offered: 7.2%
- Monthly payment on $300K mortgage: $2,041
- Total interest over 30 years: $434,760
If his score was actually 720:
- Interest rate offered: 6.1%
- Monthly payment on $300K mortgage: $1,816
- Total interest over 30 years: $353,760
The difference: $225 monthly, $81,000 over the life of the loan.
David finally checks his actual credit report. Here’s what he finds:
Error #1: Account That Isn’t His
- A Macy’s credit card showing 90 days late in 2019
- David has never had a Macy’s card
- Someone with a similar name, different middle initial
- Impact on score: -50 points
Error #2: Paid Collection Showing as Unpaid
- Medical bill from 2018 showing $450 in collections
- David paid it in 2019, has receipt
- Collection agency never updated the report
- Impact on score: -35 points
Error #3: Incorrect Credit Limit
- Credit card showing $2,000 limit, actual limit is $10,000
- Makes utilization appear 5x higher than reality
- (Utilization = balance ÷ limit, lower is better)
- Impact on score: -28 points
Total impact of errors: -113 points
David disputes all three errors. 30 days later:
- All three removed from report
- New credit score: 755
- New mortgage rate: 5.9%
- New monthly payment: $1,781
- Total interest over 30 years: $341,160
By checking his credit report and fixing errors, David saved:
- $260 monthly
- $93,600 over 30 years
- Plus better rates on car insurance, car loans, and credit cards
Time invested: 45 minutes total
Return: Over $2,000 per minute of effort
Show me another activity with that ROI.
What Your Credit Score Actually Means
Before we fix your score, let’s understand what it is.
The Credit Score Breakdown
Credit scores range: 300-850
850-800: Exceptional
- Top 1% of consumers
- Best possible rates on everything
- Pre-approved for premium cards
- Negotiating power with lenders
799-740: Very Good
- Top 20% of consumers
- Excellent rates on loans
- Strong approval odds
- Minor differences from exceptional
739-670: Good
- Above average
- Competitive rates available
- Most applications approved
- Slight rate penalties vs. very good
669-580: Fair
- Below average
- Higher interest rates
- Some applications denied
- Significant cost impact
579-300: Poor
- Bottom 20% of consumers
- Very high rates or denied
- Limited credit options
- Severe financial impact
What Determines Your Score
Payment history (35%): Have you paid on time?
- Most important factor
- Even one 30-day late payment costs 60-110 points
- Stays on report 7 years
Credit utilization (30%): How much of available credit are you using?
- Total balance ÷ total available credit
- Under 30% is good, under 10% is excellent
- Calculated monthly when statement closes
Length of credit history (15%): How long have you had credit?
- Average age of all accounts
- Older accounts help score
- Don’t close old cards
Credit mix (10%): Do you have different types of credit?
- Credit cards, car loans, mortgages, student loans
- Variety shows you can manage different credit types
- Minor factor, don’t stress it
New credit (10%): Have you opened many new accounts recently?
- Each hard inquiry costs 5-10 points temporarily
- Multiple applications signal risk
- Recovers in 3-6 months
Understanding these factors helps you improve strategically.
The Credit Score Check Money Move: Complete Guide
Ready to check your credit and fix any errors? Here’s the exact process:
Step 1: Get Your Free Credit Reports (10 minutes)
By law, you’re entitled to one free credit report per year from each bureau.
The three credit bureaus:
- Equifax
- Experian
- TransUnion
Where to get free reports: AnnualCreditReport.com
- This is the ONLY authorized free site
- Run by the three bureaus
- No credit card required
- Truly free
How to access:
- Go to AnnualCreditReport.com
- Click “Request your free credit reports”
- Fill in personal information
- Verify identity with security questions
- Choose which bureau(s) to request from
- Download or print reports
Pro strategy: Stagger your reports
- Request Equifax in January
- Request Experian in May
- Request TransUnion in September
- Gives you three checkpoints throughout the year
Alternative sources for credit score (not full report):
- Credit Karma (free, updates weekly)
- Your credit card company (many offer free score tracking)
- Discover Credit Scorecard (free even without Discover card)
Step 2: Check for These Common Errors (20 minutes)
Print all three reports. Review carefully. Look for:
Personal Information Errors:
- ❌ Wrong name, address, or employment
- ❌ Accounts belonging to someone with similar name
- ❌ Social Security number errors
Account Errors:
- ❌ Accounts you never opened (identity theft)
- ❌ Closed accounts showing as open
- ❌ Incorrect credit limits
- ❌ Incorrect account balance
- ❌ Duplicate accounts (same account listed twice)
Payment History Errors:
- ❌ Late payments you made on time
- ❌ Collections accounts you already paid
- ❌ Bankruptcies or foreclosures that aren’t yours
- ❌ Negative items older than 7 years (10 for bankruptcy)
Inquiry Errors:
- ❌ Hard inquiries you didn’t authorize
- ❌ Multiple inquiries from same auto/mortgage shopping counted separately (should be grouped)
Even one error can cost you 50+ points.
Step 3: Dispute Errors Officially (15 minutes per error)
Found an error? Here’s how to fix it:
Option 1: Online Dispute (Fastest)
Each bureau has an online dispute system:
- Equifax: equifax.com/personal/credit-report-services
- Experian: experian.com/disputes
- TransUnion: transunion.com/credit-disputes
Process:
- Create account at the bureau
- Navigate to dispute center
- Select the error from your report
- Choose reason for dispute
- Provide supporting documentation
- Submit
Option 2: Mail Dispute (More Thorough)
Dispute letter template:
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
[Bureau Name]
[Bureau Address]
Re: Dispute of Information on Credit Report
Dear [Bureau Name],
I am writing to dispute the following information in my credit file:
Account: [Creditor Name]
Account Number: [Last 4 digits only]
Issue: [Specific error – e.g., “This account shows a late payment on 3/15/2022. I paid on time, as shown in the enclosed bank statement.”]
I am requesting that this item be removed/corrected due to [reason].
Enclosed are copies of [supporting documents] supporting my position.
Please investigate this matter and correct the disputed item as soon as possible.
Sincerely,
[Your Signature]
[Your Name]
Mail with supporting documents:
- Copies of payment receipts
- Bank statements showing payment
- Letters from creditor confirming payment
- Identity documents if it’s not your account
Send via certified mail with return receipt.
Step 4: Follow Up (30 days later)
The bureau has 30 days to investigate.
What happens:
- Bureau contacts the creditor
- Creditor must verify the information or remove it
- Bureau updates your report
- You receive results by mail
Possible outcomes:
- ✅ Error removed (most common for legitimate errors)
- ⚠️ Error partially corrected
- ❌ Error stands (creditor verified it)
If error stands but you believe it’s wrong:
- Request “Method of Verification” from bureau
- Contact creditor directly with evidence
- File complaint with Consumer Financial Protection Bureau (consumerfinance.gov)
- Consider consulting a credit repair attorney for significant errors
Step 5: Monitor Ongoing (15 minutes quarterly)
Don’t check once and forget.
Set up continuous monitoring:
- Sign up for Credit Karma (free, weekly updates)
- Enable credit monitoring with your credit card
- Set calendar reminder: Check full report every 4 months (rotating bureaus)
Identity theft alert: If you see accounts you didn’t open, act immediately:
- Place fraud alert with all three bureaus
- File report at IdentityTheft.gov
- Dispute fraudulent accounts
- Consider credit freeze
Beyond Errors: Quick Score Improvements
No errors on your report but score is still low? Here are quick wins:
Improvement #1: Pay Down Credit Card Balances
Why it works: Utilization is 30% of your score
The strategy:
- Current utilization: 60% ($6,000 balance on $10,000 limit)
- Target utilization: Under 10%
- Pay balance down to $1,000
- Score increase: 60-80 points
Timeline: Reflects on next statement closing date (usually 30 days)
Improvement #2: Request Credit Limit Increases
Why it works: Higher limits = lower utilization without paying debt
The strategy:
- Current: $5,000 balance on $10,000 limit = 50% utilization
- Request increase to $20,000 limit
- New utilization: $5,000 / $20,000 = 25%
- Score increase: 20-30 points
How to request:
- Call credit card company
- Use online portal
- Soft inquiry (doesn’t hurt score)
- Approval depends on payment history and income
Caution: Don’t use the extra credit. The goal is lower utilization, not more spending.
Improvement #3: Become Authorized User
Why it works: Inherit positive history from primary cardholder
The strategy:
- Parent/spouse with excellent credit adds you as authorized user
- Their positive payment history appears on your report
- Their credit limit boosts your total available credit
- Score increase: 30-50 points
Requirements:
- Primary cardholder must have good credit and low utilization
- Card must report authorized users to bureaus (most do)
- You don’t need to use the card or even have the physical card
Improvement #4: Pay Collections Strategically
Why it works: Collections devastate scores
The strategy: Pay-for-delete negotiation
Script:
“I’m willing to pay this debt in full if you agree to remove it from my credit report. Can you provide that agreement in writing before I make payment?”
What happens:
- Some collectors agree to “pay-for-delete”
- They remove the collection from your report
- Score increase: 50-100 points
Get it in writing first. No written agreement = no guarantee of removal.
Improvement #5: Set Up Payment Reminders
Why it works: Payment history is 35% of your score
The strategy:
- Even one missed payment costs 60-110 points
- Set up autopay for minimum payment
- Set phone reminder 3 days before due date
- Never miss a payment again
Long-term impact: Perfect payment history for 12 months adds 40-60 points
The Real Cost of Bad Credit
Still not motivated to check your credit? Let’s look at the real financial impact:
Credit Score: 640 vs. 760
Mortgage ($300,000, 30-year fixed):
- 640 score: 7.0% rate, $1,996/month, $418,560 total interest
- 760 score: 6.0% rate, $1,799/month, $347,640 total interest
- Difference: $197/month, $70,920 over life of loan
Auto Loan ($30,000, 60-month):
- 640 score: 8.5% APR, $614/month, $6,840 total interest
- 760 score: 4.5% APR, $559/month, $3,540 total interest
- Difference: $55/month, $3,300 over life of loan
Credit Cards ($5,000 balance):
- 640 score: 24.99% APR, $125/month interest
- 760 score: 16.99% APR, $71/month interest
- Difference: $54/month, $648 annually
Car Insurance (varies by state):
- 640 score: $2,400 annually
- 760 score: $1,800 annually
- Difference: $50/month, $600 annually
Total Annual Cost of Bad Credit:
Monthly: $356
Annually: $4,272
Over 30 years: $128,160
That’s not a typo. Bad credit costs you over $120,000 in your lifetime.
And that’s the cost even if you get approved. Many landlords, lenders, and employers won’t approve you at all with poor credit.
Credit Myths That Are Costing You Money
Myth #1: “Checking My Credit Hurts My Score”
Reality: Checking your own credit is a “soft inquiry” and has ZERO impact on score.
What hurts: Hard inquiries when applying for credit. Even then, it’s only 5-10 points temporarily.
The truth: Check as often as you want. It’s encouraged.
Myth #2: “Carrying a Balance Helps My Score”
Reality: Carrying a balance costs you interest and doesn’t help your score at all.
What helps: Using credit cards and paying the statement balance in full monthly.
The optimal strategy:
- Use cards for normal spending
- Let statement close with a balance
- Pay statement balance in full before due date
- Result: Good payment history, low utilization, zero interest paid
Myth #3: “Closing Old Cards Improves My Score”
Reality: Closing old cards HURTS your score in two ways:
- Reduces total available credit (increases utilization)
- Lowers average age of accounts
What to do instead: Keep old cards open, use occasionally for small purchases, pay in full.
Exception: Close cards with annual fees you’re not using. The fee isn’t worth the minor score benefit.
Myth #4: “My Income Affects My Credit Score”
Reality: Income is NOT part of credit score calculation.
What matters: Payment history, utilization, length of history, credit mix, new credit.
Where income matters: Loan approval and limits. Lenders look at income, but the credit bureaus don’t include it in score calculation.
Myth #5: “Paying Off Collections Removes Them”
Reality: Paying a collection changes status from “unpaid” to “paid” but doesn’t remove it. It still hurts your score for 7 years.
What works: Pay-for-delete negotiation (see Improvement #4 above).
What to Do If You Find Identity Theft
Checking your credit report might reveal accounts you never opened. This is identity theft. Act fast:
Immediate Actions (Do Today)
Step 1: Place Fraud Alert (5 minutes)
- Call one credit bureau (they notify the other two)
- Free service
- Alert lasts 1 year initially
- Makes it harder for thieves to open new accounts
Phone numbers:
- Equifax: 800-525-6285
- Experian: 888-397-3742
- TransUnion: 800-680-7289
Step 2: Order Credit Reports (10 minutes)
- You’re entitled to free reports immediately after fraud alert
- Check all three bureaus for fraudulent accounts
Step 3: Create Identity Theft Report (20 minutes)
- Go to IdentityTheft.gov
- Federal Trade Commission’s official site
- Creates recovery plan specific to your situation
- Provides official identity theft report for disputing
Step 4: Report to Police (30 minutes)
- File report with local police
- Get copy of report
- Some creditors require police report for fraud disputes
Follow-Up Actions (This Week)
Step 5: Dispute Fraudulent Accounts
- Use your identity theft report
- Dispute with each credit bureau
- They must remove fraudulent accounts
Step 6: Close Compromised Accounts
- Call each fraudulent account’s fraud department
- Close account
- Request written confirmation
Step 7: Consider Credit Freeze
- Stronger than fraud alert
- Completely blocks new credit applications
- Must lift freeze when you need to apply for credit
- Free service
Credit freeze contact:
- Equifax: equifax.com/personal/credit-report-services
- Experian: experian.com/freeze
- TransUnion: transunion.com/credit-freeze
Ongoing Protection
Monitor regularly: Check reports every 4 months
Enable alerts: Credit monitoring services notify of new accounts
Secure documents: Shred financial documents before disposal
Protect SSN: Never give it out unless absolutely necessary
Use strong passwords: Different passwords for financial accounts
Your Credit Score Check Action Plan
Ready to check your credit and potentially save $50,000+? Here’s your exact action plan:
Today (30 minutes)
✅ Go to AnnualCreditReport.com
✅ Request report from one bureau (Equifax)
✅ Review carefully for errors
✅ List any errors found
✅ Sign up for Credit Karma (free ongoing monitoring)
This Week (45 minutes)
✅ Dispute any errors found online or via mail
✅ Send disputes certified mail if using postal service
✅ Keep copies of all dispute correspondence
✅ Set calendar reminder for 30 days to check dispute results
In 4 Months (30 minutes)
✅ Request report from second bureau (Experian)
✅ Review for errors
✅ Dispute any new errors
✅ Check that previous disputes were resolved
In 8 Months (30 minutes)
✅ Request report from third bureau (TransUnion)
✅ Review for errors
✅ Dispute any new errors
✅ Verify all three bureaus now accurate
Ongoing (15 minutes quarterly)
✅ Check Credit Karma weekly score
✅ Review full report from one bureau every 4 months (rotating)
✅ Dispute new errors immediately
✅ Implement score improvement strategies as needed
The Credit Score Challenge
I challenge you to improve your credit score by 50+ points in the next 90 days.
How:
- ✅ Check all three credit reports today
- ✅ Dispute any errors found
- ✅ Pay credit card balances under 10% utilization
- ✅ Set up autopay to never miss payments
- ✅ Request credit limit increases
What this could mean:
- Better mortgage rate: Save $200+/month
- Better auto loan: Save $50+/month
- Better insurance rate: Save $50+/month
- Better credit card offers: Save on interest
- Total: $300+/month, $3,600+/year
From 90 days of intentional effort.
Most people will never check their credit report. They’ll lose tens of thousands to avoidable errors. Don’t be most people.
The Bottom Line
Your credit score is costing you money or saving you money. You won’t know until you check.
73% of credit reports contain errors. Those errors cost tens of thousands over your lifetime. Checking takes 10 minutes and is completely free.
The Credit Score Check Money Move could be worth $50,000+ to you. The only question: Will you actually do it?
This is Money Move #5 from The Clever Wallet. Build on Move #1 (Emergency Fund), Move #2 (Budget Audit), Move #3 (Subscription Purge), and Move #4 (Savings Automation) by protecting your credit score and lowering the cost of everything.
What’s your next money move?
Related Money Moves:
- The Debt Avalanche Money Move
- The Credit Utilization Money Move
- The Payment Automation Money Move
This is part of The Clever Wallet’s Money Moves series—financial strategies that actually work. Subscribe to our YouTube channel for video versions of every money move, and download our free Credit Score Improvement Checklist at TheCleverWallet.com.
