3 Simple Steps To Improve Your Credit Score!
If you're getting turned down for credit applications, or getting stuck with high interest rates on loans or credit cards, don't despair!
In many cases the problem is caused by a low credit score. But that doesn't mean you're stuck with bad credit forever. There are ways you can take action and improve your credit score!
There are many factors that can lower your credit score using too much of your available credit (having too much debt), late payments, accounts that have gone to collections, bankruptcy, settlement and even simple mistakes on your credit report.
Many people think mistakenly that you're stuck with bad credit for 7 years, or more. While that's true in some cases, there are ways for consumers to dispute what's on their credit report. And get a lot of the "bad stuff" removed.
Why is it so important to have good credit?
Because the higher your credit score, the more likely you will be approved for a loan or credit card - and the lower the interest rate on your account. The lower your credit score, and the more likely you'll either get rejected, or pay a much higher interest rate.
Companies lending you money or giving you credit need to protect themselves from people that are less likely to pay or more likely to get into financial trouble. So they use a formula to assign each person a credit score. A low score is bad, a high score is good.
What can you do to fix your credit and raise your credit score? Follow these 3 simple steps:
1) Get a copy of your credit report. By law you are entitled to one free credit report a year, which you can get online at www.annualcreditreport.com. Each of the 3 main credit bureaus Equifax, Experian, and TransUnion keep a separate file (and separate score) for you. You need to request a copy of all 3, as each may be used by different lenders and banks.
NOTE: Be cautious about all the ads you see for "free credit reports". Many of these companies require you to sign up for credit monitoring or other services that you don't really need and that cost you money when the free trials are over! In most cases these extra services are not needed, and not worth the added expense.
2) Read your report, circle all the errors & write a dispute letter. You will receive a copy of your credit report by mail, which usually contains a form for disputing errors. You can either use this form, or write a letter (include your name, address, date of birth, social security #) and ask for the errors to be corrected. The credit bureaus must respond within 30 days of receipt of your dispute, and send you the results. Make sure to dispute all errors, no matter how small. If they won't fix the errors, try again. And when possible, include proof showing that you are correct.
3) Even if there are no errors, you can still ask for verification of any bad credit listings (late payments, closed accounts that are listed as open, collections & settlements, etc) if the credit bureaus cannot verify that these items are correct, they must be removed. While you certainly should be truthful when dealing with the credit bureaus, there is no reason not to ask for damaging items to be verified (and removed if they cannot be verified) even if they are correct. Even getting 1 or 2 of these items removed from your credit report can improve your score!
So, if you're tired of dealing with bad credit, take action!
And be responsible. There is no sense going through the process of improving your credit score if you don't fix the problems that got you into trouble in the first place. Otherwise, you'll end up having to do it all over again.
How can you be responsible with your credit?
- Pay your bills on time
- Only buy what you can afford
- Get rid of extra credit cards if the temptation to use them is too great
Even a few small changes can increase your credit score, and save you money. Don't be fooled into thinking that your managing your credit is out of your control. In fact, you owe it to yourself to do everything you can to get your credit back on the right track!
In many cases the problem is caused by a low credit score. But that doesn't mean you're stuck with bad credit forever. There are ways you can take action and improve your credit score!
There are many factors that can lower your credit score using too much of your available credit (having too much debt), late payments, accounts that have gone to collections, bankruptcy, settlement and even simple mistakes on your credit report.
Many people think mistakenly that you're stuck with bad credit for 7 years, or more. While that's true in some cases, there are ways for consumers to dispute what's on their credit report. And get a lot of the "bad stuff" removed.
Why is it so important to have good credit?
Because the higher your credit score, the more likely you will be approved for a loan or credit card - and the lower the interest rate on your account. The lower your credit score, and the more likely you'll either get rejected, or pay a much higher interest rate.
Companies lending you money or giving you credit need to protect themselves from people that are less likely to pay or more likely to get into financial trouble. So they use a formula to assign each person a credit score. A low score is bad, a high score is good.
What can you do to fix your credit and raise your credit score? Follow these 3 simple steps:
1) Get a copy of your credit report. By law you are entitled to one free credit report a year, which you can get online at www.annualcreditreport.com. Each of the 3 main credit bureaus Equifax, Experian, and TransUnion keep a separate file (and separate score) for you. You need to request a copy of all 3, as each may be used by different lenders and banks.
NOTE: Be cautious about all the ads you see for "free credit reports". Many of these companies require you to sign up for credit monitoring or other services that you don't really need and that cost you money when the free trials are over! In most cases these extra services are not needed, and not worth the added expense.
2) Read your report, circle all the errors & write a dispute letter. You will receive a copy of your credit report by mail, which usually contains a form for disputing errors. You can either use this form, or write a letter (include your name, address, date of birth, social security #) and ask for the errors to be corrected. The credit bureaus must respond within 30 days of receipt of your dispute, and send you the results. Make sure to dispute all errors, no matter how small. If they won't fix the errors, try again. And when possible, include proof showing that you are correct.
3) Even if there are no errors, you can still ask for verification of any bad credit listings (late payments, closed accounts that are listed as open, collections & settlements, etc) if the credit bureaus cannot verify that these items are correct, they must be removed. While you certainly should be truthful when dealing with the credit bureaus, there is no reason not to ask for damaging items to be verified (and removed if they cannot be verified) even if they are correct. Even getting 1 or 2 of these items removed from your credit report can improve your score!
So, if you're tired of dealing with bad credit, take action!
And be responsible. There is no sense going through the process of improving your credit score if you don't fix the problems that got you into trouble in the first place. Otherwise, you'll end up having to do it all over again.
How can you be responsible with your credit?
- Pay your bills on time
- Only buy what you can afford
- Get rid of extra credit cards if the temptation to use them is too great
Even a few small changes can increase your credit score, and save you money. Don't be fooled into thinking that your managing your credit is out of your control. In fact, you owe it to yourself to do everything you can to get your credit back on the right track!
Source...