You can clean your bad credit report most effectively when you combine several methods to erase negatives and beef up the areas that help your credit score the most. Showing responsible use of credit will go a long way toward repairing a poor score. Also, if you find mistakes on your credit report, they can be disputed.
Get Credit Reports from the Right Source
You need your credit reports to find mistakes that can be cleaned off your records, but the bureaus make you pay for orders through their websites. Get reports via AnnualCreditReport.com, the Federal Trade Commission advises, because it gives you free, no-obligation copies once per year as mandated by federal law.
Dispute as Many Mistakes as Possible
The Fair Credit Reporting Act, which regulates credit report disputes, places no limit on the number of complaints you may file. Mistakes do not have to directly relate to an item's influence on your credit rating. Late payment information in a credit card entry hurts you but cannot be disputed if it is accurate. You may still dispute that entry if anything else is wrong, like the account origination date or credit limit.
Send Disputes Through Postal Mail
The FTC advises writing dispute letters and sending them out via certified mail. The credit bureaus encourage online disputes, but the Internet does not provide hard evidence of receipt or allow you to attach additional documents.
Validation of Changes
The credit bureaus give you fresh credit report copies after they process your disputes. Compare the new reports to the bureaus' summaries of your dispute outcomes to be sure all the relevant data is erased. Notify them if you find anything remaining that should be gone.
Remove Hard Inquiries
Hard inquiries show up on your credit reports when you apply for new accounts, and MyFICO warns that too many hurt your credit. Clean them off by requesting proof of authorization from the relevant companies, the Illinois Attorney General advises. Those companies must erase the inquiries if they cannot produce documentation showing that they had your permission to pull your credit history.
Set Up Automatic Payments
Timely payments are an important part of cleaning your credit reports, as they account for over one-third of your credit score, according to scoring site MyFICO. Most banks let you set up automatic bill payments, eliminating the risk of missing the deadline and adding a delinquency to your credit reports.
Pay Down Your Debt
High credit card debt looks bad on your credit reports, so MSN Money writer Liz Pulliam Weston recommends lowering your balances to no more than 10 to 30 percent of your credit limits. This improves your debt-to-available-credit ratio.
Use Credit Regularly
Clean credit reports contain positive, current information. Generate this by using your credit cards regularly, even if it is just for small purchases. Buy things you can pay off readily so your reports show a history of responsible credit use and payments.
Monitor Credit Reports Regularly
Mark your calendar as a reminder to get your free credit reports every 12 months. Alternately, you can get a single report from a different bureau every four months to catch mistakes. Clean up your reports as needed whenever you find new errors.
Use Personal Statements on Your Reports
You may not agree with some of the information left on your credit reports after you clean them. Add personal statements explaining your position, as this information gets passed along to lenders. These statements are limited to 100 words, according to the Federal Reserve Bank of San Francisco, and must be submitted separately to each bureau.
0 comments:
Post a Comment