Building a good credit score and maintaining it is an ongoing process. The best way to improve your credit scores is to learn how to manage your debt wisely. If you’re thinking of buying a home, car, or big ticket item in the near future, you must keep on top of your credit and do everything in your power to increase your credit score.
Please note that the ratings in the world, nothing happens overnight. Even with the fastest ways to increase your credit score, it can take at least 30 days before positive actions are reflected in the credit file. Therefore, what can you do to improve your credit score quickly?
1st Get your credit report and credit score.
You have the right to obtain a free copy of credit report from each major investigative bodies, consumers (credit bureaus EI): Equifax, Experian and Trans Union.
Get all three reports because they may vary slightly. A credit score is calculated on the basis of information contained regarding credit amount, credit usage, and credit age. Different companies have different formulas for calculating the results, but the most commonly used credit score is a FICO rating.
This is your first step to improve your credit score… Get your credit reports.
The next step is ..
Review for incorrect information.
The first time you look at your credit report, you will be surprised to see both what is included and excluded. Unfortunately, not all information is correct. Studies have shown that at least 25% of credit reports have errors.
Sometimes you will share information with someone that has a similar name. A worse case scenario is that you’ve been a victim of identity theft. the next thing ..
3rd Cause of inaccuracies in your credit report.
If you think a Credit Bureau has mistaken you for someone else, make sure that your name is spelled correctly. Do you have any alias’? Also, make sure that the social security number of the credit report is correct. Is you current and past addresses correct?
If you find errors in these regards, you must contact the credit bureaus to correct this info.
4th Credit Report Is In Error.
You may flat out find that information is incorrect as it relates to your credit accounts. For instance, are you showing duplicate accounts, late payments actually paid on time, closed accounts that are open, open credit that has actually been completely paid, and so on. When these errors occur, agencies are required to investigate and resolve. But you must notify them first.
First, you must send a dispute letter to identify the errors and sent that to the bureau which shows the incorrect information. Free sample dispute letters are available on this website. Send any supporting documents to the credit bureau as well. For example, copies of credit card statements and checks that have been cashed.
The credit bureau in question must remove the incorrect information within 30 days. If the credit bureau can not verify the negative information from the creditor in question, they should remove that item from your credit report. If the report is correct, you have the right to obtain that information.
As a heads up, do not forget to make copies of letters to credit bureaus.
5th Start paying your bills on time, and pay regularly on all of your debt.
If at all possible, setup automatic payments online. This is one way to ensure that your bills will be paid on time. One other tip. Do not close accounts that you have paid off. In this day and age, your FICO score will actually decrease if you close an account. Reason being is that you are scored according to how much available credit that you have versus how much credit you are using at any particular time. If you are using $3000 and have access to $10,000 in available credit, you are using 30% of your available credit balance. If you pay off a card that you owe $500 dollars on, you now owe $2500. However, if you had an available balance on that card of $3000 and you close that account, you now owe a total of $2500 but only have an available balance of $7500, thus you’re credit use is actually higher at 33% and your FICO will go down. Make sense?
