Your credit report is gathered from a number of sources. Credit card companies and financial institutions give your payment history to credit agencies. The credit agencies also research public records like court documents that might state legal judgments against you.
Your credit score is will range from 300 to 850, with 850 being perfect credit. The higher your credit score the better lending terms you can expect.
You can be denied a loan, insurance and even employment with a bad credit report. You have the legal right to find out the reason you were denied a benefit based on your credit report and the name of the credit bureau that provided the report.
If you find inaccuracies in your report, you should contact the credit agencies. Write detailed descriptions of the disputed items in a letter to the credit agency. Keep copies of the letters and send them “return receipt requested.” That way you will know that they received your letter.
The credit agency will usually respond within 30 days. If you do feel that they’ve addressed the issues correctly, you can attach a brief (100 word) statement to your report so that lenders can hear your side of the story.
If the credit agency agrees to make changes, check the report within 60 days.
Boosting your credit score can be easy but it takes time. Pay your bills on time. If you can’t make a payment, contact the creditor as soon as possible and work out a payment plan. Make sure you negotiate terms you can live with and that you keep up the payments.
Another way to improve your score is to close unused accounts and keep only a small number of credit cards. Keep the balances on those cards low.
Don’t apply for accounts you don’t need. This raises red flags on your credit score. If you can’t get a bank credit card, you can establish a credit history with a department store card or gasoline credit card. Use them responsibly and your score will improve.
Beware of any agency that promises a quick fix. Some scam artists offer to “fix” your credit by providing your business with a new Employer Identification Number (EIN). This practice is illegal.
Professional credit report counseling can be a good option if you use a reputable agency. Members of the National Foundation for Credit Counseling (www.nfcc.org) or the Association of Independent Consumer Credit Counseling Agencies (www.aicca.org) must be accredited and adhere to strict standards of professionalism. They use only certified credit counselors.
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