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Credit ReportHow to Improve Your Credit Report and ScoreBy Catherine
BillSavings.com Brief:
As you move toward financial independence, carefully consider the role of your credit report and credit score. Is your reputation helping or hurting you? Since so many businesses and banks have access to this information, it's important that you have access as well and then take the time to improve your score. Often your credit report contains errors. Your payment history, personal details, and current activity are all stored in this data and you must ensure it reveals only the most accurate and up to date information.
Most have no room on your credit report for errors. Public judgments against you, bad credit, bankruptcies, or destructive decisions leave no room for mistakes that don't belong to you. Never assume that the information contained within your credit report is automatically correct. People who work at the agencies receiving this information make mistakes all the time. Because such negative items stay on your credit reports for years and affect your ability to attract favorable interest rates, you must stay on top of your reports and fix mistakes as quickly as you can. You must access your credit reports and carefully research the listed items in order to determine if errors have been made. Remember not to access all three credit bureau reports at the same time, rather view one every three to four months. This helps you to stay on top of things and quickly resolve disputes before they harm your credit history further. After you've accessed your credit report, study each entry and look for possible mistakes. Especially if you have several negative items and a lower than average score, it's worth your time and energy to make sure the report contains only accurate information. If you discover mistakes, there are actions you can take to correct them. The process toward correcting mistakes Credit agencies receive requests to correct mistakes every day and must take time to carefully review each one. Therefore, be prepared to call, fill out request forms, write letters, and follow-up in order to see that the mistakes are corrected in a timely fashion. If you see accounts from creditors with whom you've never been connected or done business, chances are they are on your report in error. Often, other people's credit history is put on your reports and you must request that they be removed. Many negative items pull down scores and so this is one important reason why you must regularly view and keep track of your reports. If the report lists something in error, simply inform the credit agency and request more information. Once you've determined an error is made, you must contact the creditor directly to get them to remove the mistake from your report. The credit agency should be able to give you contact information for every listing they use. Making a phone call first is usually the best way to get the issue resolved. Before phoning the creditor, you should have a pencil and paper nearby to document the phone call. Try to speak with a manager, but in any case make note of the customer service representative's name, employee number, and extension. This will assist you when following-up just in case the issues aren't resolved in a timely manner. Hold these agencies responsible as they are required, by law, to resolve credit disputes within 30 days. Therefore you must advocate for yourself and see to it these problems get solved. Fixing minor errors Creditors are businesses and, often times, staffed by reasonable people who are dedicated to good customer service. If you miss payment due dates due to illness or unexpected family emergencies, often creditors will request an explanation in writing and then remove such isolated negative items from the report. All of these instances improve your scores, so it's worth the effort to try and resolve minor infractions whenever you can. There are times when a creditor will not remove such items from your reports. For these instances, all three credit agencies allow you to submit a 100-word explanation. You should take care to remove all emotion or inflammatory words from your explanations. Just the facts should suffice and provide you with a good opportunity to explain your side of the story in as succinct and professional a way as possible. You shouldn't pay others what you can do yourself Many companies advertise to clean up your credit reports and improve scores for outrageous fees. This is unnecessary. If your credit report contains legitimate financial mistakes you've made in the past, no company can come in and make those issues disappear. Conversely, if there are creditor errors contained within, you can solve them yourself with the right amount of time and energy. Since you are making the move toward responsible money management, you must not forgo that journey and derail yourself by paying a company making dubious claims for something you can more effectively do yourself. Why corrections are important Regularly obtaining your credit reports, taking the time to research possible mistakes, and then correcting errors will only help you in the long run. Remember, those with average scores and positive credit reports get the most favorable interest rates and loans. For this reason alone, it's important to know your credit scores, keep a keen eye on your credit reports, and quickly fix mistakes. Much of your financial future depends on it.
1/1/2008
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