A credit report is like a gateway to financing opportunities, low interest rates, new housing and employment. If you have a bad credit report, the doors to these opportunities may close. This report tells a story about your credit worthiness, spending history and financial past. If you need to fix your credit report, it is never too soon to get started.
Your Credit Report
The most important aspect of fixing your credit report is knowing what information is recorded on the report. The Federal Trade Commission (FTC) states that you can get a free annual report from the credit bureaus'-- Experian, TransUnion and Exifax---central website, Annual Credit Report.com. For a fee, you can order more than one report in a 12-month period.
Check your report to figure out why your credit score is low. Late bill payments could be the problem. Or, there could be errors on your report. Look for statements saying that you spent more than your credit limit when you did not; that you had late payments that you actually turned in on time; or that you had new credit cards for which you did not apply.
Reporting Errors
Make a list of any errors you find on each report, listing the oldest accounts first with their corresponding dates. Write to each applicable credit bureau regarding the errors, citing each individual error, its date and the reason for your dispute. In your letter, ask the agency to amend the incorrect information. It is a good idea to include documents that support your claims, such as bank statements, receipts and canceled checks, as well as a copy of your credit report. According to the FTC, you should highlight the errors on the copy of the report you send. Save a copy of the letter and mail the original to the credit bureau via certified mail. The FTC states it can take up to 30 days for a credit reporting agency to begin the investigation on your claim.
Budgeting
If your credit report has a low score because of less-than-perfect spending habits, follow the FTC's advice to create a budget. Set money aside for necessary expenses, create an allowance for unnecessary items and work toward paying your debts and saving money. Necessary expenses are those that help meet basic needs and debt payments, such as housing bills, groceries, car payments and insurance. Unnecessary expenses may include trips to the nail salon or a gym membership. As you create a budget, note bill due dates on a calendar. If you have an electronic calendar on a computer or cell phone, use the feature that reminds you of events so you do not forget to pay your bills on time.
Piggyback
When you piggyback, someone with a good credit score adds you as an additional cardholder on one of his credit cards so his good credit starts to reflect on you. You should only piggyback with an individual who has good credit and a good payment history because a delinquency can reflect poorly on your credit score. Moreover, your bad spending decisions with the shared credit card account reflect poorly on the other person. If you find someone who will allow you to piggyback on his credit, it may be best to never use the credit card that comes in your name.
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