Improve Credit Score Through Accurate Credit Reports And Responsible Borrower Behavior
If you improve your credit rating, you can have access to prime interest rates or increase your chances of having your loan applications approved. Repairing your credit record is not a complicated process. You just have to exercise patience and discipline in applying all of the steps.
The first thing you have to do to improve your credit reputation is to get copies of your credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion. These reports are free once every 12 months if you avail of them from the credit bureaus’ centralized Website, annualcreditreport.com. Once you obtain your credit reports, you need to assess them for accuracy. All the factors considered in calculating your credit score come from the information recorded in your credit report. It is, therefore, very important to make sure that all the information, especially the negative items, are accurate.
Common errors that have been spotted on credit reports include duplicate accounts, accounts that rightfully belong to another person, and false delinquencies. If you discover any inaccuracy, write a dispute letter to each of the credit bureaus. The Fair Credit Reporting Act places the responsibility for providing accurate credit reports on the credit bureaus and the agencies that provide them with the reports. This being so, the credit bureaus are legally obligated to investigate your disputed items within 30 days. If within those 30 days, they are unable to get verification on the items you disputed from your creditor or debt collector, the credit bureaus must erase these negative items from your report.
After seeing to it that your credit reports have been cleared of inaccuracies, you have to deal with the source of the accurate negative items in your credit reports. 35% of your credit score comes from your payment history, and another 30% comes from your credit utilization. Keep in mind that each late payment would be recorded as a negative item and would take away points from your credit score. The longer the delinquency, the greater the deduction from your score. If your late payments are due to a lack of organization and forgetfulness of your due dates, then you have to set-up a system that would effectively remind you of these dates. Also, lower your credit utilization ratio by striving to use only a third of your credit limits. Paying off some balances would boost your score.
