Understanding Your Credit Report and Credit Score
Understanding how your credit reports and scores affect your financial situation is crucial in today’s world. Credit scores determine whether you can even obtain credit and maybe more importantly, what you will pay for credit cards, automobile loans, mortgages and much more. They can also be used to determine if you get a job offer or an apartment in the city’s most coveted community.
So where you do you start if you have low credit scores? How do you repair a credit score? The first step is to acquire a copy of all three reports from the three credit bureaus: Equifax, TransUnion and Experian. After you have these, you will need to determine which items are lowering your scores.
It’s fairly easy to pinpoint what is causing the damage. Most reports are divided into sections that allow you to single out what’s considered negative. Keep in mind that it’s not always the case, though. This is why it’s important to go through and highlight each account that you suspect is causing damage. Once this information is listed, you can then begin to make a plan of action on how to eliminate or improve these accounts.
Some accounts won’t be able to be improved; however, they can be removed. Other items, such as those with late payment histories, can be updated to show the account in a positive light. You can contact the lenders directly in your efforts in repairing these accounts. If the creditors are not willing to work with you, and unfortunately, most are not, then you will need to dispute the accounts directly with the credit bureaus.
Under the Fair Credit Reporting Act, you have the right to dispute any information on your credit report. This is done simply by writing a letter to the credit reporting agencies. Once they have received your request, they are required to verify the information with the provider. This must be done within thirty days and if it cannot be verified, it must be deleted.
Once you’ve cleaned up your credit report, the next step is to take steps to allow positive information to begin reporting. Acquiring new accounts is as important as deleting negative accounts. One of the best ways to do this is by obtaining a secured credit card or an unsecured credit card from a local credit union or your bank. Prepare yourself for the possibility of having a higher interest rate and/or low credit limit. This is OK because your goal is to use these cards to rebuild your credit. Keep your balances at or below 30% of the available credit limit.
Chane Steiner is the president and founder of AAACreditGuide.com, the credit repair authority site. He has helped many people repair their credit and get back on their feet. Chane has compiled a list of the top credit repair services.
