Good credit is absolutely vital in our country. Many mistakes are made and well documented in handling credit yet no one would argue how important it is to maintain good credit habits. The following is a few basics that will help you improve your scores.
Step 1: Determine what needs Improvement? Your first order of duty is to determine exactly what derogatory and incorrect items show on your credit report. There are several ways to accomplish this but the easiest is simply going directly to the source. There are 3 credit bureaus that creditors use. They are as follows; www.equifax.com, www.transunion.com, and www.experian.com.
Make sure that you order your reports from these three bureaus and not go to any free credit report offer. Many times you will find that the report is not free and they do not offer your score either. They are primarily interested in upselling you into some sort of monthly credit monitoring plan.
Once you receive your reports then take note of each one separately. All three bureaus report based on different matrices and will reflect different information. Note what items are derogatory. A derogatory item is any item that is listed as a public record or that has a late payment.
Step 2:Dispute the issues. Make sure that when you dispute the incorrect and derogatory items that you do it by hand written letters in your own words. Do not use the standard bureau forms that are provided. The employees at the bureaus are real people trained to be on the look out for credit repair companies and false disputes. You will get a better response by taking the time to personalize things.
Challenge all the inaccurate information on your report. It can make a huge difference in credit score very quickly. If there are derogatories on you report that are in fact yours then it is best to begin by contacting the creditor directly. Creditors will often remove derogatory information at the request of a current client. Sometimes putting pressure on them to act in your behalf by threatening to close the account if you are not satisfied will produce quick results.
Step 3: Wait or Pay. Many people are aware that after 7 years most derogatory credit comes off. What many people do not know is that investigating an old item can reactivate the derogatory and cause an immediate drop in credit score. In some cases, the closck may even be "reset" for another 7 years. Be cautious in investigating old items. Make sure that you have proof that the items are either paid or incorrect.
One trick, so to speak, is to be sure to keep your available balances at no more that 50% and better yet 30%. You can see a quick improvement of your score if you are able to transfer a balance onto a card that is at zero and have two cards at 30% of available rather than one at zero and another maxed out.
Step 4: Be careful establishing new credit or closing old accounts. Most people don't realize that a simple act like closing out an old account that you have not used for a while can lower your score. One of the contributing factors to your score is the length of time your credit has been established. That means that older accounts, even those no longer used, will have a favorable effect on your credit score. Never close out old especially if you are in the process of applying for a mortgage or loan.
By applying these basic steps you can fix or maintain your credit. Though it is not an easy task it is worth the effort. There are some cases where using a reputable credit repair agency is helpful but first apply these simple steps that I've outlined here and you'll be on your way to great credit and financial security.
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