Although it is not easy to increase your credit score, and it will take some time, it can be done. The following steps will help you to attain that magic score.
Pay all your bills on time
A good credit report results from a sound payment history. If you continue making your payments on time for a long period, it further helps to establish your creditworthiness. In fact, this is not merely restricted to paying your mortgage, car loans or credit card. It extends to your cell phone bills, utility bills and rent as well.
Pay your credit cards on time
Pay your credit card on time each month. Surprisingly, paying off your revolving accounts dramatically affects your credit score. In fact, it is best if the total balance of each credit card remains below 25% of the total available credit limit.
Avoid bounce checks
You might think how can a bounce check affect me? However, bounced checks do affect your financial history and quite adversely! Even though the overdraft might not come up on the credit report, there are some finance companies and banks that have their own system of tracking people with bad a history of bounced checks. Also, if a bounced check remains unpaid, the balance may be collected and reported by a debt collector.
Check your credit limit
Check if your credit card issuer is accurately reporting your credit limits. If they are not, call up your credit card issuer and request them to accurately report the current credit limit.
Rehab Student Loans
If you have a student loan and missed a payment or have defaulted, you can try entering a ‘rehab’ program.
Check your credit report once a year
Many people don’t like looking at their credit report because it takes time and can be depressing if there are a number of delinquent accounts. A person with a bad credit record may not want to review his credit report, but it is necessary to check it once a year. Quit often there are numerous mistakes on your credit report. More so, you might even detect some fraudulent activity. If you notice any such errors, you should dispute them immediately.
If the judgment is entered against you, it will appear on your credit and adversely effect your credit rating. If you are sued for a debt, it is important to contact an attorney who can help you defend the lawsuit.
You can try asking a collection agency to eliminate a debt from your report, in case you pay off the debt. However, make sure you get everything (the agreement) in writing. Send a payment only after the terms of agreement are met.
Work to increase income and pay off debt
Although this sounds simplistic, often, the best way to increase your credit score is to pay down debt and make sure you pay all your bills on time.
If you have questions about your credit report, please feel free to contact me.
Different Types of Credit Reports
Credit reports can be of diverse types and every credit report provider seems to adopt an unusual layout style. To get a good grip on the entire credit report system, one must first have a good idea about the many types of credit reports and the information provided by them. Though it is quite tough to decipher the information provided in the reports, once you become accustomed to reading the different reports, you can begin to decipher the reports. Following are the different types of credit reports:
A consumer report is all about a consumer’s own credit history. Such a record can be offered by any local credit bureau in U.S. You can place your order from any of these bureaus. A credit report can be ordered at any time of the year and for any reason. While you ask for such a report, there is usually a fee associated with ordering the report.
The consumer credit report usually includes your name, address, SSN and at times, your date of birth. It might contain all the account numbers in your name and any joint account you have. The credit report usually also has the date the accounts were opened, the credit balance, the credit limit, the type of account (revolving, installment, mortgage), and the entire payment history.
Annual Credit Report
The annual credit is a report that is offered by the three major credit reporting agencies. The annual credit report comprises information related to the credit history of a consumer’s residing in U.S.A. Every consumer in U.S.A. has the right to get a free copy of the report. You are entitled to the report once every 12 months.
Business Credit Report
Unlike a consumer credit report, a business credit report holds the credit information of a company or a business. There can be a single bureau credit report along with a consumer’s financial history. It is usually created from the reports provided by one of the three big credit bureaus namely, Experian, Equifax or TransUnion. There may even be a three bureau credit report formed by a compilation of reports sent from all the three big credit bureaus.
Both the three bureau credit reports and the single credit report offer the following data:
Individual identification information, which includes your name, previous address, phone number, date of birth, present and previous place of work and social security number.
Your credit history containing information about the bills you pay at retail stores, mortgage firms, finance companies and banks.
Any kind of public records that contain information such as court judgments, lax liens or bankruptcies. These can be used to question your creditworthiness.
Inquiries containing a list of firms who have requested to look at your credit report and credit score, as well as any credit grantor who has already viewed your report.
Thus, a credit report summarizes your financial history with most (if not all) of the important financial information.
If you have questions about either consumer credit reports or business credit reports, please feel free to contact me.