FIVE STEPS TO IMPROVING YOUR CREDIT RATING

Missing payments for debt owed or delinquencies on your credit report can cost you a lot of time and money, but it is never too late to clean up your act and start improving your credit.  Here are five helpful tips to get you on the right path.

Step #1 Order Your Credit Reports

Once a year you are able to order a free credit report from the three main credit bureaus.  The three main are bureaus Equifax, Experian and TransUnion.  Look at the information reported to each of the bureaus.  Keep in mind that some of the information may be different due to the fact that some creditors only report to certain bureaus.  There are a number of credit report websites that you can retrieve this information from.  A popular credit report website is www.annualcreditreport .com.   Try to review your credit report twice a year in order to keep on top of your credit.  Also, if you denied credit, employment or insurance due to credit, you have 60 days to request a free credit report after receiving the denial notice.     

Step #2 Examine Your Reports Carefully

It is sad to say, but keeping a clean credit report is your job.  Credit bureaus do not verify the information they receive from creditors.  Any negative information on your credit report can cost you a lot especially if you are trying to get a mortgage, a personal or a car loan, or a credit card.  Once you receive your credit report, look over every detail.  Even the misspelling of your name or a wrongly reported address can cost you points.  Remember that late payments and charge-offs remain on your credit report for 7 years.  Bankruptcies remain on your report for 10 years.  Making consistent payments will improve your credit over time.

Step #3 Dispute and Document

After you have examined your credit report, it is time to start the dispute process.  Any information that is inaccurate or incorrect and you want to dispute. Send a written dispute letter along with your supporting documents to the credit bureau with a copy of your credit report.  The credit bureau must investigate the dispute within 30 days.  If you do not receive a response from the creditor, the negative information will automatically be removed from your report.

Step #4 Dissolve Your Debt

Next step you can take on the path to improving your credit is to dissolve your debt.  Begin by drawing up a spending plan that fits your financial status and allows you to make payments on time and consistently.  If you are having trouble making payments on time or meeting the payment itself, call the creditor and negotiate new lower payment and/or due date.  Keep in mind not to close your credit accounts after they are paid off.  It will hurt your score more to close the accounts then to keep them open.  Also, keep your balances low on revolving accounts.  This will help with keeping your interest charges down.

Step #5 Add Stability To Your Credit File

Last, but not least, start rebuilding your credit file today.  You may have been denied credit even though you have credit because some creditors like gas card companies or credit unions, may not report to the three bureaus.  To prevent this, before signing up, ask if they report to any of the three bureaus.  If they do not, think about choosing another creditor.  The faster you begin to repair your credit, the faster your score will go up.  Start now….