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5 Steps To Improving Your Credit Score
Category: FinanceWhether or not lending or financial institution will give you a loan or credit depends on your credit score. Your credit score is based on how you pay off your previous and existing loans. It gives lender a pretty good picture of how good you are at managing and paying off your debts.
While you are alive and functioning in society, your credit score changes. Your decisions regarding your debt will lower or raise your credit score. Making good financial decisions may help raise your credit score.
Here are some steps you can take towards improving your credit score:
- Find out your credit report
The 3 credit bureaus, Equifax, TransUnion, and Experian have their own reports regarding your creditworthiness. They may have different reports because they may not have the same kind of information as creditors don’t need to report to each and every one of them. If you have been denied credit or employment because of your credit score, you are entitled to ask for a copy of that report from the credit bureau because the company you applied to is required by law to submit the name of credit bureau they got the report from.
- Study your reports from all 3 bureaus carefully
The job of a credit bureau is to report on information supplied by you creditors. Since they don’t verify the information they receive there may be some mistakes in the information given. It may sound unfair but keeping your credit report a true reflection of your creditworthiness is your job. Be meticulous in making sure all information such as dates and figures are correct. Make a list of items you want to dispute and be ready to defend your claims.
- Dispute and Document, the Double-D strategy
Be very thorough in documenting all mistakes you find in your credit reports. Identify which points of the reports are wrong and tell them why. A good stategy is to give the credit bureaus photocopies of their reports and encircling the mistakes. Don’t forget to supply the correct entries to the mistakes. Keep all documents and forms you send to the credit bureaus and keep note of the dates. The credit bureaus must look into and investigate all credit disputes within 30 days. If a dispute is not verified by a creditor, it must be automatically removed from the report.
You can also go to the creditors themselves and try to resolve any mistakes directly.
If any changes are made to your credit report, the responsible credit bureau will send you a free copy of the revised report. Negative entries that have been removed cannot be put back in the report unless the creditors can verify accuracy and completeness of the entry. They should also send you written notice that they are going to do so.
- Solve and Dissolve debt
Find ways to finally get rid of your debts. Resolve all unpaid debts by negotiating for longer payment schemes and lower interest rates. Avoid getting a delinquent or bad credit standing. When you’ve paid off your credit debt, consider getting rid of your cards.
- Stabilize your credit file
Make sure your credit records are updated and complete. Sometimes, creditors don’t report to credit bureaus so it’s up to you to make sure they do.
Try to re-establish good credit especially if you’ve had bad credit previously. You’ll improve your credit score faster if you keep your credit active and in good standing.
The best way to show creditors that you’re a good credit risk is if you have enough money in the bank to show that you save and that you’re able to pay them off.
F Stewart develops personal finance software to help youth and adults better understand credit. CredMedic is a free software application that includes a credit calculator, creditor database, and personal finance information. More information is available at http://www.CredMedic.com
Tags: credit history, credit report, credit score, personal finance, credit