How to Dispute a File on Equifax

Your credit report contains personal information, credit history, inquiries and public records. Equifax is one of the main credit score reporting bureaus. You may obtain a free copy of your credit report once a year (see the Resource section) and you should review it carefully. If you find an error on your credit history report, you may dispute it. This may take from 30 to 45 days to resolve, according to the Equifax website.

Instructions

1

Locate the Report Confirmation Number, which is located at the top of your credit report. While you do not have to have this number available, it will assist customer service in locating your record.

2

Call the number provided on your report. Alternatively, visit Equifax's online dispute web page (see the Resources section). If you do not have your Report Confirmation Number, dispute your credit file by mail. Send a letter and supporting documents to:

Equifax Information Services, LLC

P.O. Box 740256

Atlanta,GA 30374

3

Complete the online form or explain your dispute to the Equifax representative. Submit the form. This will initiate an investigation into your credit report claims.

4

Wait up 30 to 45 days for the result of the investigation. You will receive a copy of your adjusted report, if there is one.

5

Review this report carefully to see where your information has been changed or deleted. If the incorrect information is still on the report, ask for it to be noted as disputed, which will give you the opportunity to add an explanation to your credit file, advises Equifax.

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Help to Reestablish Credit

A drop in your credit rating after a bankruptcy doesn't have to result in a lifetime of bad credit. Reestablishing credit after experiencing severe credit problems is key to fixing a low credit score. There are several methods for rebuilding or reestablishing credit; and the sooner you start, the sooner you can achieve a prime rating.

Review Credit Report

Start reestablishing your credit history by checking your personal credit file (see Resources). You're checking your credit report for inaccuracies that can reduce your score; and if you recently filed bankruptcy, checking your report ensures that the appropriate debts were included in your bankruptcy, which means you're no longer liable for them. Credit reports can include mistakes. For example, your creditors may mix accounts and list a delinquency or collection account on your report in error. Dispute these errors to help reestablish your credit and raise your score.

Credit Cards

Acquiring credit is key to reestablishing credit. Unfortunately, some creditors will not give you a credit card or loan with a poor credit history. To rebuild your credit history, apply for credit with a bank that offers secured credit cards. These types of accounts are readily available to people with no credit history and those looking to reestablish their credit. Getting approved requires paying a security deposit to the bank or card issuer, and your credit limit equals the deposited amount.

Timeliness

Building a good credit score calls for smart credit habits. One smart habit involves making your credit card and other loan payments on time each month. Payment record is a huge factor in credit scoring, and regularly missing payments will decrease your score and inhibit all efforts to reestablish your credit. MyFICO.com says that payments to creditors make up 35 percent of scores. Set up automatic payment schedules or pay several days early to avoid lateness.

Reduce Debt

Credit scores also factor in how much debt you owe. In fact, outstanding balances are another major factor in your score. Reestablishing a good credit history involves not only paying your creditors, but paying down your debts. Whether you have a secured or unsecured credit card, start a habit of paying off balances in full each month, or at least widen the gap between the credit limit and what you owe. Ideally, balances should not exceed 30 percent of your credit limit, says MSN Money.

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How to Fight Bad Credit Report Additions

It can be disheartening to see a drop in your credit score, especially when you have been doing all the right things. If you notice that the change in your score is from inaccurate information, you can contact the credit bureaus to remove the inaccuracies. It can take a month or two to have bad information removed from your credit report, but it will result in an instant credit score improvement.

Instructions

1

Make a list of the errors on your credit report. Besides looking at your accounts, be sure that you note any unauthorized inquiries. Occasionally, a company will look at your report before sending you a pre-qualified credit card application, even though you did not authorize it.

2

Gather the information you need to refute the bad information. Find bank statements or other information that supports your request. For example, you may show canceled checks that prove that you made a payment or a letter that shows that an account was closed.

3

Send a certified letter to the credit bureaus disputing the information. Include the documents that you collected to support your claims. The credit companies have 30 days to research and respond to your statements.

4

Contact the agencies again by mail if you do not hear from them within 30 days.

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Will a CD Help Rebuild Your Credit?

If you need credit or insurance, your credit score may impact whether you are approved. The information in your credit report determines your credit score, and the better your score, the easier it will be for you to qualify for credit products. If you have damaged credit, it's important to know that a savings instrument such as a CD cannot help rebuild it.

Identification

A certificate of deposit, commonly called a CD, is a savings instrument issued by a lending institution where a depositor deposits a fixed sum of money with the lending institution for a set time at a fixed interest rate. The certificate of deposit accrues interest over this period. It is not a credit-based account and as such, it is not reported to the credit bureaus; therefore, it will not help rebuild your credit nor affect your credit score in any way.

Consideration

Some banks issue a secured credit card, which is a credit card whose credit limit is based upon a deposit with the bank. The bank will keep that deposit in either a savings account or a certificate of deposit, depending upon the policy of the bank. The bank reports the secured credit card account to the credit bureau. If you maintain the card in good standing, some banks will convert the secured card into a non-secured card and return the deposit money to you.

Significance

According to MyFICO, how well you pay your bills overall accounts for 35 percent of your FICO credit score. It's the largest factor in the calculation of the score. Maintaining a positive payment history on a secured credit card and other credit-based bills will improve your credit score over time and rebuild your credit. FICO credit scores range from 300 to 850, and the higher the score, the better your credit. A late payment can drop your score by as much as 110 points, according to Bankrate.

Warning

Think twice before using a credit repair service. It could be a scam, according to the Federal Trade Commission. Not only do these companies charge fees for their services, but they may not be able to improve your credit at all. The Fair Credit Reporting Act requires credit bureaus to remove credit errors and inaccuracies from your report. The law does not mandate that credit bureaus remove negative information if its accurate. Negative accounts remain on the report for up to seven years, and bankruptcies can remain for up to 10 years.

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Ways of Calculating FICO Scores

A consumer's FICO score is a version of a credit score available through the three major credit bureaus: Experian, TransUnion and Equifax. The majority of financial institutions use FICO scores to determine the credit risk of individuals. There are a variety of factors that go into calculating a FICO score, each with its own significance.

Account Information

One of the largest factors in determining a FICO score is the payment history and amounts owed on accounts. These two factors account for 65 percent when calculating a FICO score. The payment history examines payment information on all types of accounts, including credit cards, mortgages, installment loans and retail charge accounts. The severity of delinquency, the amount past due on delinquent accounts and the time since delinquency are considered. The amounts-owed calculation looks at the amount owed on all accounts, the number of accounts with balances and the amount owed on specific types of accounts. In addition, the amount of credit lines used and the proportion of installment loan amounts owed is also considered.

Length of Credit History

The length of a consumer's credit history will also play a role in calculating a FICO score, accounting for 15 percent of the calculation. In addition, the amount of new credit on a consumer's report will account for an additional 10 percent of the score calculation. Length of credit history includes the time since all accounts have been opened, the length of time since the accounts have had activity and the length of time since specific types of accounts have been opened. New credit accounts include the number of credit inquiries, the time since accounts have been opened and the reestablishment of positive payment history following delinquency.

Types of Credit Used

The remaining 10 percent of a consumer's FICO score calculation consists of the types of credit accounts that are on the report. This will include a look at the number of credit card accounts a consumer has as well as any retail charge accounts or consumer finance accounts. Installment loans such as a personal loan or auto loan are also considered. A mortgage will also play a factor in determining a credit score if a consumer has one on her report. The recent information on each account will also be used in calculating a score.

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How to Get a Free Credit Score in Canada

Credit scores can affect the interest rate you pay on mortgage loans and whether your credit-card applications will be approved. Know your score and make sure the information about your credit is accurate by obtaining a free credit-score report.

Instructions

1

Log in to Canadian-CreditReport.com and click the red button labeled "Free Credit Report."

2

Click the "Credit Report Request Form" link. You will get your report from Experian Canada, Trans Union of Canada or Equifax, based on the province where you reside.

3

Complete the "Consumer Relations Information Form," print and sign.

4

Make a photocopy of your driver's license and credit card, making sure to copy both sides. If you do not have a credit card, you can provide a copy of your birth certificate, citizenship card or certificate of Indian status.

5

Mail your Consumer Relations Information Form and photocopies to the address specific for your province of residence. You should receive your free credit score in approximately four weeks.

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How to Keep Monthly Track of Your Credit With Experian

Experian is one of three major credit bureaus, in addition to TransUnion and Equifax. Although you can obtain your Experian credit score from third-party credit-report companies, you can also keep track of your credit by ordering an Experian credit-report product. Your can access your Experian credit report at any time and keep monthly track of your score after ordering the product.

Instructions

1

Visit the Experian product selection website (see Resouces) and select either the Experian Triple Advantage Credit Monitoring product or the Identity Theft Protection product. Triple Advantage Credit Monitoring monitors your credit score from each of the major three credit bureaus each day and monitors if anything changes; you also have access to your Experian credit report at anytime. Experian Identity Theft Protection includes all features of Triple Advantage but also protects your identity by monitoring unauthorized use of your credit cards, your Social Security Number and notifies you if someone changes your address.

2

Enter your personal and payment information, such as your name, address, social security number, phone number and credit card information. Submit your information. You must answer two random security questions. For example, Experian may ask you which street you've lived on in the past 10 years and give you a list of options. Click "Submit" again. Your Experian homepage will appear.

3

Click the "Report" or "Score" tabs to view your report and score. The "Score" page will display only your score, while "Report" will display your score and all of your credit information. Click "Logout" once you are done. You can visit Experian.com to view your credit report and score again at anytime by clicking the "Login" button and signing into your account.

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How to Interpret the Fair Issac Credit Report Score

The Fair Isaac Corporation computes consumer scores using an intricate computing system that rates credit worthiness. The three national consumer credit reporting bureaus report consumer reports and scores, so consumers, creditors, lenders, employers and other approved parties can obtain the most accurate reading of a person's credit and bill paying history. Interpret a Fair Isaac credit score the right way, so you know how you fare as a consumer and what this means for your credit applications.

Instructions

1

Purchase a comparison of your three credit reports and scores from the three national consumer reporting bureaus: Experian, Equifax and TransUnion. Experian's website reports that you can obtain all three credit reports and scores for $40. TransUnion reports a similar three-bureau report product for $29.99; however, only New York residents receive free credit scores as of November 2010. Experian's website reports three-bureau reports with and without credit scores for $39.99 and $29.99 respectively.

2

Educate yourself on how a FICO score is determined. Understand that your payment history accounts for the largest portion of your credit score, at 35 percent. Debts owed make up 30 percent of your credit report, whereas your credit history makes up 15 percent. The types of credit you currently use and the rate at which you open new lines of credit account for the smallest portion of your credit score, at 10 percent.

3

Look for a three digit number ranging from 300 to 850, with 850 being the highest and most favorable and 300 being the lowest and least favorable.

4

Determine your delinquency rate. Credit scores between 300 and 499 have a delinquency rate of 87 percent, which is the least favorable of any credit score range. Credit scores between 500 and 549 drop to 71 percent, whereas credit scores between 550 and 599 and 600 and 649 dip to 51 and 31 percent respectively. Scores between 650 and 699 have a 15 percent delinquency rate. The most favorable scores -- which span between the 700 and 749, 749 to 799 and 800 to 850 -- report the lowest delinquency rates, with 5, 3 and 1 percent respectively.

5

Compare your credit score to the national prime rate, which is the benchmark at which banks set interest rates for consumers with the most favorable credit rating. Find the national prime rate at Wall Street Journal Prime Rate's website (see Resources). Check daily or weekly for the most current updates.

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The Best Ways to Repair Bad Credit

Your credit score is made up of various factors in your financial history. The bulk of your score is based on payment history, total outstanding debts and the length you have had established credit. When you understand these factors and know your credit score, devising a plan to improve your credit is easier to accomplish.

Payment History

Start the process of credit repair by requesting your credit report to see what it includes. You can get a free report from freecreditreport.com. Your history of on-time payments makes up the largest percentage of your credit rating, about 35 percent. The definition of an on-time payment is that you have not been over 30 days late in paying a bill. When you exceed 30 days for making a payment, the creditor will often report this to the credit agency. Late payments stay on your report for seven years. However, the older the late payment the less impact it has on your rating.

If you feel there are errors on your report, send a written letter of dispute to the three credit reporting agencies--Experian, TransUnion and Equifax--and the creditor in question. Follow up written letters with a phone call to all three bureaus and the creditor and ask for removal of the item in dispute. If the creditor rules in your favor, it will send you a letter confirming the resolution.

Total Debts

Evaluate the total amount you owe and the ratio of unused credit on a particular card. Your goal should be to have a large amount on available credit that you don't have to use. Control this by paying down your credit card bills before using more credit or by using cash to make purchases.

Be aware of the impact on your credit when you have a credit card that is getting close to its limit. It is better to have a credit card with a limit of $5,000 that has a balance of $1,000 than to have a credit card limit of $1,500 with a balance of $1,000. The ratio on the second card is higher and can negatively impact your rating. If you can maintain a balance of less than 35 percent of your card limit, your credit rating will improve.

Current Accounts

The longer you have credit open, the higher your scores will be, so don't close old accounts. The credit formula works in your favor when accounts in good standing remain active. This doesn't mean that you need to use them; just keep them open.

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How Can a Credit Rating Get Damaged?

FICO scores are a credit rating system that was designed in the 1950's by Fair Isaac and Company to analyze a person's credit risk. The Daily Interest website says that credit scores can range from the low 300s to 850, which is perfect credit. People with good or excellent credit pay lower interest rates on home and automobile loans. There are a number of factors, however, that can cause you to lose points on your credit score.

High Credit Card Balances

According to the Credit Cards website, your debt should not exceed 30 percent of the available credit on your account. If you have a high balance on your credit cards, you might be viewed by a lender as being too deeply in debt to be able to handle another loan balance, or at a high risk of defaulting on a loan. This can cost points on your FICO score.

Late Payments

Late or missed payments can damage your credit score. According to David Ellis, a writer for CNN Money and the author of the July 2006 article "5 Ways to Destroy Your Credit," 35 percent of your credit score is based on your credit history, and missing even one payment can cause your score to drop dramatically.

Debt Settlement

Money Zine explains that debt settlement is an arrangement between you and your creditors that allows you to pay off a debt at a reduced amount. This arrangement can damage your credit rating because part of the arrangement often involves a negotiation period, and during this time the minimum monthly balance on the card is not being paid. The missed payments can damage your credit score.

Short Sale/Deed in Lieu

The short sale of a home or a deed in lieu of foreclosure can damage your credit as well. A short sale is an agreement between a debtor and a mortgage lender that allows you to sell your home for less than your purchase amount, while a deed in lieu is when you sign your house back over to your mortgage holder. Both of these options can harm your credit because there are usually missed payments involved in the process.

Bankruptcy

Bankruptcy is one of the most damaging things you can do to your credit report. A bankruptcy will relieve you of your credit card balances and many of your loan obligations, and the Mortgage Credit Problems website indicates that it will temporarily stop foreclosure procedures against your home. Your credit will suffer because of the payments that you miss during bankruptcy proceedings, as well as because of the bankruptcy itself.

Foreclosure

Having a bank foreclose on your home will severely damage your credit rating. In addition to the payments that you missed during foreclosure proceedings, the foreclosure itself will cause you to pay higher interest on credit. You will pay more interest on car loans, your credit cards and personal loans will have higher interest rates, and it might be several years before you are able to purchase another home, according to Mortgage Credit Problems.

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Easiest Ways to Improve Credit

If you've been turned down for loans, credit, housing or employment because of a low credit score, you aren't alone. According to Bankrate.com, Fair Isaac Corporation statistics illustrate that 15 percent of U.S. residents have credit scores below 600. If educating yourself on credit reporting laws and actively working to repair your credit score seems daunting, there are easier ways to boost your credit rating.

Dispute Online

Online disputes offer a quick, functional way for consumers to contest information within their credit reports that damages their scores. You have the right to dispute any item within your credit record. Federal credit reporting laws give each credit bureau 30 days to contact the information provider and attempt to validate the information. Thus, claiming a debt isn't yours when your creditor can easily prove that it is won't do you any good. A U.S. Public Interest Research Group survey, however, demonstrates that 79 percent of all consumer credit files contain errors. You can dispute an accurate negative account if it contains small errors such as incorrect dates and missing creditor contact information. If your creditor doesn't correct the account, the credit bureaus will remove it.

Increase Credit Limit

The amount of debt you carry on your credit cards and lines of credit significantly affects your credit score. Credit scoring models compare the amount you owe your creditors to your available spending limit. The result is your debt utilization ratio. The higher your debt utilization ratio is, the lower your credit score will be. Ideally, your debt utilization ratio should rest around 10 percent, but you can carry a ratio of up to 35 percent before your credit score suffers as a result.

While paying down your credit card debt will lower your debt utilization ratio, doing so isn't always easy--or fast. One effective way to lower your ratio without paying a lump sum to your credit card provider is to request a credit limit increase. Credit card companies are most likely to grant your request if you can demonstrate a recent history of timely payments or are a long-standing customer.

Goodwill Letter

The payment histories on your accounts are responsible for 35 percent of your credit score. If you've made a few late payments in the past that are dragging down your score, you can request that your creditor forgive those late payments and remove them from your credit history with a goodwill letter. Goodwill letters work best if you only have one or two late payments on record and have a long history with the company. If mailing a goodwill letter yields no results, try again. Credit card companies possess large customer service departments and it's unlikely your goodwill letter will end up in the same hands the second time around.

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About Bad Credit

Bad credit is a reality for many consumers, but what exactly is bad credit? Neglecting to pay bills in a timely manner will result in bad credit, as will overextending the credit accounts you have. Avoid this expensive predicament by effectively managing your debt and staying in contact with you lenders if you do encounter trouble meeting your monthly obligations.

The Facts

Bad credit can refer to a low credit score or to actual items listed on a credit report, or a combination of the two. Although there is no definitive number indicating a bad credit score, must lenders deem a score of 500 or below as "bad credit." All lenders have their own credit scoring standards, so while one lender may consider 500 to be bad credit another might consider it a reasonable risk. Bad credit comes from making payments late or not at all or from overextending the accounts you have. Bad credit is not directly related to your income or employment history.

Risk Factors

Having bad credit can affect your chances of getting approved for revolving credit accounts and installment loans. The loans and credit cards that you are approved for will be at a higher interest rate than for someone with a better credit score, and you will also encounter more fees with less attractive overall terms. People with bad credit usually fall into the category known as sub-prime lending, so they wind up paying a lot more in interest and fees than they would have if they had a good credit score. A bad credit score can also affect your chances of getting employment and insurance coverage.

Misconceptions

It is a common misconception that bad credit can be cleared up very quickly by paying a company to contact your creditors. The truth is that it takes time to build up a credit score, especially if the consumer spent years wrecking it. No company, no matter how much they charge, can permanently erase bad credit from your credit bureau report.
Another misconception is that bad credit disappears from your credit report once you bring it current or pay it off. Negative items can stay on your credit report for years, making it difficult to get approved for credit at decent interest rates even after you bring all the accounts up to current status.

Time Frame

Bad credit can appear on your report as quickly as thirty days after you missed a payment. Negative credit items are usually reported as thirty days late, sixty days late, ninety days late and so on until they are reported as over 180 days late. The longer the account goes unpaid the lower the credit score will drop. It can also take some time for the lender to report an account as current after having been in delinquent status. Sometimes it can take as long as two or three payment cycles before your credit report indicates that you are no longer delinquent.

Expert Insight

Most financial experts agree that bad credit should be avoided as much as possible, although there are some times when bad credit seems inevitable. If a person suffers a job loss or medical emergency and does not have sufficient savings to fall back on, then it's often the credit score that suffers as bills go unpaid. Bad credit can take years to clean up, but many financial experts agree that it's worth the effort.

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Does It Hurt Your Credit If Several Dealers Pull Your Credit?

It is very common for a frugal car shopper to visit several lots and banks before making a crucial decision about which car to buy and whom to finance it with. Interest rates and prices vary widely in this industry, and a car shopper with adequate credit should do due diligence. Multiple credit checks can harm your credit, but only within certain situations.

FICO Basics

When you apply for a loan or credit card, most lenders will pull a credit report from the three national credit reporting companies: Equifax, Experian and TransUnion. Your FICO score is a mathematical representation of the results of your three credit bureaus' information. There are two types of inquiries, soft and hard, which affect your credit, or FICO score, differently. A hard pull of your credit, as when you apply for a credit card, reduces your credit score by five points or less under normal circumstances. A soft pull, as when your insurance company investigates your credit monthly to verify your ability to pay, does not affect your credit in this way.

Loan-shopping Exception

When you apply for a home or car loan multiple times, the managers of your FICO score do not count any home or car loan inquiry made within 30 days of your scoring date. For multiple inquiries over the 30-day window, they are all gathered together as one hard inquiry. There are actually three versions of the FICO formula lenders can choose from, but the 30-day rule applies to the most common of the three. The other two versions are the same concept except they change the time frames to 15 and 45 days respectively.

Shopping Alternatives

Some loan shoppers, in order to avoid potential mistakes in coding an inquiry as a loan-shopping one, will merely pull an annual credit report made available free yearly from AnnualCreditReport.com to examine the results. While this free report will not have a credit score, it will give you an opportunity to investigate and correct any negative marks on your credit. You can attempt to present this credit report to your lender to get a general idea whether your credit qualifies for preferred interest rates, although an inquiry will be required before making the loan rates official.

Results

After you purchase your car, regardless of the method of financing it, wait 30 to 60 days and order a copy of your credit report with a FICO score. Investigate it closely to verify you were not charged with multiple inquiries for loan-shopping for your car. If you were, you can dispute the findings of the report with the address on your report. The credit bureau is required by law to validate the blemish or correct it within 45 days.

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What Do I Need to Do to Clean Up My Credit Report?

While credit repair organizations promise to help you clean up your credit report, there is nothing a third-party organization can do for your credit that the Fair Credit Reporting Act (FCRA) does not give you the right to do yourself. By carefully monitoring your credit information and practicing responsible debt management habits, your damaged credit rating will gradually improve over time.

Dispute Inaccuracies

The goal of the FCRA is to provide all consumers with the most accurate credit records possible. Because of this, the FCRA contains a provision permitting consumers to file credit bureau disputes requesting that each bureau investigate and remove inaccurate information within their credit files. You can dispute inaccurate information with the credit bureaus by mail or by phone. After receiving your dispute, each credit bureau attempts to verify the information with the creditor who reported it. If the information is inaccurate and unverifiable--or the creditor does not respond to the credit bureaus' inquiry--the bureaus will remove the disputed item from your credit records. Provided the item you disputed had a negative impact on your credit rating, having it removed will improve your credit scores.

Goodwill Letters

The credit bureaus will not remove negative information on your credit report if the information is accurate. Your creditors, however, have the ability to modify any information that they reported. A goodwill letter is merely a written request that your creditor remove negative information it previously reported on the basis of your good behavior and long standing as a customer. For example, a consumer who typically pays on time may send a goodwill letter to his credit card company requesting that it remove a one-time missed payment.

Paid Deletion

Collection accounts are a common feature of damaged credit reports. In the interest of recovering payment, certain collection agencies agree to delete their negative reports if you agree to a lump-sum settlement or pay off your balance in full. Because a collection account has a negative impact on your credit rating, having it deleted improves your credit scores.

Responsible Debt Management

Your most recent activity with your debts has the greatest impact on your credit rating. Although old derogatory entries still affect your credit scores, the FCRA dictates that all credit information can only remain within your files for a limited amount of time--usually seven years. Making timely payments and maintaining low balances on your revolving accounts, such as credit card accounts, demonstrates responsible debt management and helps you build a positive credit history. The longer you participate in responsible debt management, the more your credit score will improve.

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How Fast Can I Get Credit After I File Bankruptcy?

Consumers have two bankruptcy choices, Chapter 7 or Chapter 13, according to Senior Magazine Online. Chapter 7 wipes away most debts, excluding obligations such as child support and student loans. Chapter 13 involves a structured repayment plan. Both types of bankruptcies appear on the consumer's credit report, and both have negative influences on future credit applications.

Types

Credit comes in two main types, known as secured and unsecured accounts. Law Info, a legal information website, explains that a secured account is backed with collateral, most commonly a home or vehicle. An unsecured account is not backed by anything other than a promise to pay. Most credit cards and personal loans fall into this category.

Effects

Recent bankruptcy is a red flag to many lenders because they fear the person does not manage his finances well and is a poor repayment risk. Many consumers rebuild their credit carefully after bankruptcy, but it takes time and new accounts to prove fiscal responsibility. A low post-bankruptcy credit score makes it hard to open the accounts necessary to rebuild credit.

Considerations

Creditors are much more likely to open a secured credit account, rather than an unsecured credit account, for someone who has recently been through bankruptcy. A creditor will issue a credit card immediately if the consumer is willing to back it up with a bank deposit that covers the credit limit. This is known as a secured credit card account, according to MSN Money columnist Liz Pulliam Weston. Many lenders also will give car loans shortly after bankruptcy, but they charge higher-than-average interest because bankrupt consumers are considered sub-prime credit risks.

Time Frame

Bankruptcy stays on a person's credit report for up to a decade, Pulliam Weston advises, but much of its impact is lost over time. Creditors pay the most attention to recent transactions, so people with bankruptcies at least a year old can usually get credit at a fair interest rate if they've opened secured accounts and made every payment on time. They can usually convert secured credit cards to traditional accounts after a year or two of good payment history is established, Pulliam Weston explains.

Warning

Creditors and scammers sometimes take advantage of people who want to get credit quickly after bankruptcy. The Federal Trade Commission warns against paying upfront fees for a loan because the money is unlikely to ever materialize. Read credit card terms carefully to identify any excessive fees.

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How Long Do Judgments Stay on a Credit Record in California Law?

California tends to be one of the most progressive states when it comes to rights for consumer credit reporting --- a number of public records disappear sooner than if you lived in another state. Public judgments, however, usually follow federal credit reporting standards. That doesn't mean you can't get a judgment removed from your record before it does its damage.

Identification

Public judgments in California typically appear on your credit report for seven years after the court files the case with the county clerk --- the same as every other state. The only exceptions to this are bankruptcy judgments, which remain up to 10 years if you file Chapter 7, seven years for a Chapter 13 and tax liens, which remain for seven years after you pay them or 10 years if they're unpaid. Experian reports unpaid tax liens for 15 years, while Equifax and TransUnion report them for an indefinite amount of time. Leniency in California for tax liens is less important than in previous years, because the Internal Revenue Service passed a new rule in 2011 that lets the taxpayer remove all records of a tax lien as soon as he pays his debt.

Statute of Limitations

Public judgments can stay on your credit report for the longer of seven years or whenever the statute of limitations runs out on a judgment --- 10 years in California, according to the California Office of the Attorney General. However, once the judgment leaves your report after seven years, it can't return. Even if the creditor renews the judgment, which it can do every 10 years, the judgment can't reappear on your report.

Effect

Do whatever it takes to prevent a court from entering a judgment into the public record, because your credit report follows you in the United States, even if you leave California. Public judgments can do dozens of points of damage to your credit score --- not repaying a debt is a blemish on your credit history and a sign that you may not be of high character.

Tip

If you feel you were sued in error, you can motion to vacate the judgment in California. You have 30 days to file a motion to vacate after receiving a "Notice of Entry of Judgment" or 180 days after discovering the notice if you were never formally served with the notice. Judges usually rehear your trial immediately if the court accepts a motion to vacate, so prepare evidence to disprove the validity of the case when go to file a motion to vacate. Alternatively, you could try to settle with the judgment creditor --- the suing entity --- to prevent the judge from entering a decision into the public record.

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How to Protect My Social Security Number

Social security numbers were introduced in 1936 as a way to identify people by the government. Nowadays, your social security number is used in just about everything. It is used in medical records, credit accounts, bank accounts, just to name a few. Since the use of the SSN has proliferated, so has identity theft. Criminals now use your SSN to steal money by opening credit accounts and sometimes even getting mortgages.

Instructions

1

The best way to protect your social security number from identity theft is to use your SSN as less as possible. The more times you give that number out, the more likely it is to fall into the wrong hands. Many businesses don't need your SSN for you to do business with them. If they ask, just tell them no. You are not legally obliged to give your SSN.

2

Protect your social security number by not carrying the card in your wallet. If your wallet is stolen, then so is your SSN. Also, do not write down your SSN on anything.

3

Protect your social security number by requesting a copy of your credit report. The report will contain information regarding credit and bank accounts that have been opened through your SSN. If you spot any suspicious accounts, report it to the FTC and credit bureaus.

4

Use an identity theft monitoring service to protect your social security number. Any transactions involving your social security number would be reported to you.

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Quickest Way to Raise a Credit Score by 100 Points

Although the common belief is that you cannot raise your credit score quickly and that it requires quite a bit of patience and dedication, there are some ways that you can get to work on raising your credit score that won't hurt your bank account and, more importantly, allow you to get the needed loans you may want in the future. Raising the credit score by 100 points is a great way to get those easy approvals.

Get Your Reports

There are three credit companies that creditors rely on for an evaluation of how safe an investment you are. These three companies---Experian, Equifax, and TansUnion---keep track of everyone's credit, and each has a different report of you. You can go online to get them, or call the companies and ask for your credit report. You want to get your reports so that you can go through and make sure all the information is legitimate. You might find a name discrepancy or, more dangerously, you might find that you have a line of credit listed that you didn't open. In the end, getting your credit scores is the first step in raising your credit, because you have all the facts in front of you.

Pay Down Credit as Much as Possible

It is important to start knocking the credit down as much as possible. You don't have to get rid of it (that will come in time), but if you can get it down so you only owe 30 percent of the total amount you can borrow, you will demonstrate to the credit agencies that you are good. This can easily raise your credit score anywhere from 10 to 100 points. You can get upwards of 250 extra points if you get rid of any odds and ends such as late payments and missed payments.

Negotiate, Negotiate, Negotiate

While it might seem better to just hide away from your credit card companies, it is much better to contact them and discuss your credit with them. Often they can help lower your interest, eliminate any late fees, and increase your repayment period, which makes your payments easier to make. This shows the credit agencies that you are responsible enough to negotiate, which can increase your credit by anywhere from 25 to 100 points.

Pay It All Off

Once you have the creditor's word (on paper) that it will remove any late fees and late payments from your information, or at least make mention in your account that you paid and negotiated, you can get rid of all the debt. Once the credit card company has its money back, it will make that mark in the account, which could raise the credit report anywhere from 10 to 60 points.

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The Effect of an Additional Credit Line on the Credit Score

When used responsibly, an additional line of credit can increase your credit rating. It is necessary, however, to maintain a healthy mix of different types of credit to keep your credit report balanced. This reflects well on you when your report is viewed by lenders.

Types

The types of debt reflected on your credit report account for 10 percent of your score. A line of credit is a revolving account because the amount you owe and the payment amount may change over time. An additional line of credit will provide a good balance to your report if the majority of your debts are installment accounts, such as loans.

Benefits

A debt-to-limit ratio is the percentage of your spending limit that you owe on your debts. Additional lines of credit reduce this ratio, which benefits your credit score--especially if you always carry a balance under 10 percent of your limit on your revolving debts.

Disadvantages

Having too many open lines of credit may be considered risky financial behavior by future lenders who review your credit history. This can result in a higher interest rate on new credit or loans that you are approved for.

Considerations

Your credit rating may drop slightly when your new line of credit appears on your report. This is due to the inquiry that the lender conducts to determine your eligibility for new credit. This is normal, and your score will recover quickly.

Warning

If you do not make regular payments on your lines of credit, your credit report will reflect late payment notations. Your payment history makes up the largest percentage of your credit score, and late payments will significantly hurt your credit rating.

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How to Get a Credit Report for Free Without Using a Credit Card

The information on your credit report can affect your life in many ways. Whether you're seeking a mortgage to buy a home, a loan to purchase a car, or simply applying for a job, the outcome often rests on results of a credit check. There are three major credit reporting agencies, and the information contained on your credit report can vary depending on the agency from which it is obtained. Luckily, you are entitled to get a free copy of your credit report from each agency one time per year.

Instructions

1

Navigate to AnnualCreditReport.com. This site allows you to obtain a free copy of your credit report from TransUnion, Equifax and Experian once every 12 months.

2

Select your state from the drop-down menu in the center of the page and click the red "Request Report" button.

3

Fill out the form with the requested information and click "Continue."

4

Check the box next to the reports you wish to access. You can choose to access an individual agency or all three at once. Click "Next" when finished.

5

Click "Next" again to be transferred to the reporting agency's website. Enter the last four digits of your Social Security number when requested, and click "Next" again.

6

Select the option to access your free annual credit report and click "Submit." Answer the identity verification questions and click "Next." Your credit report will load on the next screen.

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5 Surprising Ways to Increase Your Credit Score

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Will Paying Medical Bills Improve Credit?

Doctors and hospitals do not normally add medical bills to your Experian, TransUnion and Equifax credit reports if you pay them in full or through mutually agreeable payment arrangements. Your payments do not improve your score unless you charge the bills on a credit card and repay it in a timely fashion. Unpaid medical expenses hurt you if they go to a debt collector, but you have ways to fix the damage.

Settlement Agreements

Some collection agencies work for doctors and hospitals. Others buy bad debts that get written off by the original medical providers. Debt collectors in both situations will often negotiate a settlement with you that improves your credit in exchange for partial or full payment. Negotiate a mutually acceptable amount, but insist on removal from all three credit reports as a condition of the deal, Bankrate.com writer Brigitte Yuille advises. Make the collection agency put this promise in writing before you put up the money. Otherwise, the paid medical account looks just as bad because it still shows you had an account in collections.

Credit Disputes

Paid medical bills are sometimes removable from your credit reports even if you did not get an agreement with the creditor before you sent your money. Collection agencies often have incorrect information that gets passed along to the credit bureaus. For example, they might not have an accurate date for the bill or be slightly off in the debt amount. You get to dispute the entry with Experian, Equifax and TransUnion if you find even a tiny discrepancy. The Divorcenet website explains that creditors often ignore validation attempts on old or satisfied accounts, which forces the credit bureaus to erase the information completely.

Time Frame

Collection accounts for medical bills only hurt your credit for a limited amount of time. The Federal Trade Commission explains that Experian, Equifax and TransUnion erase them in seven years, whether or not you ever paid them, which automatically improves your credit.

Warning

Medical bills, like other debts, are only legally collectible for a certain time period, based on your state of residence. Firms called zombie debt collectors buy bills for pennies once the statute of limitations expires and try to bully people into paying them, even though there is no legal obligation, according to MSN Money writer Liz Pulliam Weston. The old medical bills should already be gone from your credit reports, and paying them will not improve your credit. You hurt yourself if you send even a small amount to a zombie collector because this restarts the legal collection period in many states.

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How to Piggyback to Increase Credit Score

Your credit score is a big deal in the United States. Its affects your ability to get employed, obtain a credit card, purchase a car, rent an apartment or own a house. Consumers who have low credit scores may find themselves ineligible for several opportunities. As a result, some will piggyback to increase a credit score. Piggybacking is where a person with a high credit score and a credit card adds the person with the low credit score as an authorized user on a credit card. As a result, the credit score of the individual with bad credit increases.

Instructions

1

Know your credit score. Purchasing a FICO credit score report or learning about your credit score from another credit reporting agency will let you know how low your score is. You can use a credit report in the future to see how much it has improved by piggybacking.

2

Ask a person with a good credit score to add you as an authorized user on one of her credit cards. A good person to ask is someone close to you, like a spouse, sibling or parent. Ideally, this individual should have a long credit history.

3

Do not use the credit card that comes with the other individual's credit card account. If you cannot pay your own bills or do not have the immediate funds to pay back the other individual right away, you could end up hurting their credit score by making frivolous purchases. This, in turn, will not help your poor credit situation.

4

Order a copy of your free credit report one month after being added as an authorized user on the credit card account. You should see the new credit account on this report. If not, call the credit card company to find out when they will update their reports with the credit bureaus.

5

Check your credit score three months after being added as an authorized user on the credit card account to see if it has increased. Continue to check your credit score periodically.

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How to Remove Public Information From Credit Reports

It is a very good idea to periodically request copies of your credit reports so that you are aware of what information is being given to potential creditors. Although part of the information in our credit profile is not visible to the public, we must be especially cognizant any of public parts of our credit reports that need to be removed or corrected. If there is information on your credit report that should not be there, take action quickly to correct the problem.

Instructions

1

Obtain copies of your credit reports. You can request free copies of your credit report online from each of the three major credit reporting companies: Equifax, Experian, and Transunion (see Resources for links). Do not simply obtain your report from one of the credit bureaus, as there may be different information on each report.

2

Research the problem. Does something need to be removed from your credit report because of an inaccuracy, or because enough time has passed since the incident (for example, bankruptcy filing) that legally you are allowed to request that it be removed? Make sure your request is well-founded.

3

Contact each credit bureau. Each credit bureau will have a system for challenging information on your credit report. You may make your request online, in writing, or over the telephone; just make sure that you are following the credit bureau's guidelines as to the correct process. Use each one's dispute mechanism to explain why certain public information should be removed. If the information is not public, there is no need to dispute the issue as potential creditors would not be able to view that information.
The credit bureau will be required to follow up on your request and will send you their decision as to whether they will remove the information.

4

Contact third parties. You may need to contact the creditor, company or organization involved in the information you need removed from your credit report. For example, if you need to remove erroneous information regarding a tax lien, you should call the IRS for a letter explaining the error. Such third-party documentation will help you with the credit bureaus.

5

Take it one step further. If the credit bureau does not initially agree that the particular information should be removed, they will provide information as to what further steps you can take. Call a customer representative to request specific instructions as to how to send in supporting information to prove your request is valid. You will then have a point of contact with a name and telephone number so that you can get periodic updates or ask further questions.

6

Request updated credit reports from all three credit bureaus. You can then send copies to any businesses or persons that have recently requested a credit check on you.

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What Are the Credit Score Brackets That Banks Look At?

Only 13 percent of Americans have a credit score above 800, according to HowTo EstablishGoodCredit.com. Although this is the most desirable bracket, you can usually get away with a lower score to receive the best rates.

Top Tier

Most financial institutions lump credit scores in the range of 720 to 850 in the same bracket, according to Kiplinger.com. Any score in this range will get the best rates, or close to the best rates.

Considerations

Banks consider anything above 760 or 770 as an elite score with almost no risk. These will receive the best rate possible, but usually not much better than someone with a score between 720 and 760.

Second Tier

Scores between 700 and 719 are generally considered second-best by banks. However, these usually do not have much higher interest rates than those above 720, according to Kiplinger.

Lower Tier

Scores from 660 to 700 are less ideal for banks, but they should be enough to eventually find credit. Jumping up to the top tiers generally saves enough money on interest to make the work worth the effort.

Lowest Scores

Typically, a FICO score between 580 and 640 will mean some of the poorest rates and terms, but not as bad as anything under 550. Scores below 550 are considered subprime and will lead to the worst interest rates.

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What Can I Do to Increase My Credit Score?

Your credit score is a reflection of how well you have managed credit in the past as well as a predictor of how well you will manage credit in the future. Having a low credit score can mean restricted access to credit and higher interest rates, among other things. Fortunately, there are many things you can do to increase your credit score and improve your chances of getting the best credit terms.

Remedy Any Errors

Information in your credit report is the basis for your credit score. If you have past due accounts or massive debts, it can lower your credit score. However, your credit score may also be low for reasons beyond your control. Bankrate.com cites a 2004 study showing that up to 80 percent of all credit reports contain an error. Bankrate suggests getting a copy of your credit report annually and checking it for errors. If you find an error, dispute it in writing, either online or through the mail, and provide copies of any supporting documentation you have.

Pay Bills on Time

Arlene Dang, manager of analytics for Experian, says on the company's website that payment history is the biggest factor driving your credit score. A history of paying late, not only on credit cards, but also on utility bills, car loans and mortgages, can lower your credit score significantly. To increase your credit score, make sure to pay all bills on time. Paying bills as soon as they arrive in the mail or setting up online payments are ways you can ensure you pay your bills before the due date. Even if you have gotten behind and made some late payments, catching up and then paying on time consistently will help boost your score, MyFICO.com says.

Keep Debt Down

How much you debt you have is the second-most important element of your credit score, according to MyFICO.com. A good way to boost your credit score is to keep the balances on your revolving credit, such as credit cards, low. Make sure to pay as much as you can toward your credit card bill each month, and pay off the balance entirely if you can afford to. Not only will this keep your debt ratio low, it will help you avoid paying interest charges on your debt.

Limit Your Accounts

Another factor in your credit score is how many open accounts you have. This is one area where the same criteria can have both positive and negative effects on your score. For example, the more accounts you have open, the higher your credit limit is, meaning your debt ratio will be lower, which is a positive indicator for your score. However, whenever you apply for a new credit card, your credit score takes a small hit, and constantly applying for new accounts is a red flag to creditors. To help build your score, keep two or three cards to use regularly. Resist the temptation to open a new store credit card every time the store is offering a discount or other incentive. On the other hand, don't close accounts that you are no longer using, because this can hurt your credit history, especially if you have had the cards for a long time. Instead, cut the card up or put it in a safe place where you don't have easy access.

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What Is an Adverse Credit History?

Credit scores mean everything in the lending industry and having an adverse one has an impact on more than just your creditworthiness. There is no specific definition of "adverse credit history," because lenders decide this themselves, although a typically poor credit history most likely contains late payments, collection accounts/charge-off and/or a bankruptcy. A poor credit history, however, is not the end of the world, and you can rebound from one eventually.

Identification

Those with an adverse credit history usually have several negative items on their record, such as late payments and defaulted debts. Each lender determines what risk is acceptable for its institution. Usually, a consumer receives the worst annual percent yield once his score falls below 674. Scores below 560 are the most adverse and get "sub-prime" rates.

Effects

If you can find a lender willing to offer credit when you have an adverse credit history, you will typically pay $20,000 to $50,000 more for a mortgage than a borrower with excellent credit. Lenders are not the only ones who look at your credit history. Utility companies, even cellphone providers and cable companies, may charge a deposit to activate your service. They do this because you technically receive a "service credit" since you pay at the end of the month. Employers may use credit history as the tipping point between two equally qualified candidates.

What Can Cause an Adverse Credit History?

How diligent you are at paying bills on time is the most important factor in a credit score, so seriously delinquent payments --- at least 90 days late --- can wreck an otherwise great score. If you had a 780, for example, a 90-day late payment drags your score down to a 645 to 665. Failure to pay a debt that leads to a charge-off or sale to collections agency and bankruptcy are other items a person with an adverse history might have on their credit.

Tip

It is possible to mend an adverse credit history in a hurry. Run a check on yourself, scan the report for errors and dispute the mistake with the credit bureaus. Pay your bills by the due date; your bank probably offers a payment reminder service that alerts you by email or text. When you have disposable income, pay down any outstanding debt.

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Are Lenders Required to Send Consumer Credit Score Disclosure Letters?

When you are denied credit from a lender, the lender must send you a credit disclosure letter that explains exactly why you were denied credit. Any company using information on your credit report to offer you credit, bank accounts, insurance or a job is required to let you know exactly why you were denied, and what credit bureau report the information comes from for a denial.

Fair Credit Reporting Act

A consumer credit disclosure letter, commonly known as an adverse action letter, is required by the Fair Credit Reporting Act. The lender is legally required to send an adverse action letter when information on your credit report leads to a credit denial. Adverse action letters are also used if the lender charges you rates or fees not normally incurred due to your credit.

Required Information

The lender must include specific information on the adverse action letter to fulfill the legal requirements set forth by the Fair Credit Reporting Act. The disclosure letter must provide the consumer with the specific credit reporting agency that the information was pulled from, specifically the name, address and telephone number of the agency. A note also must be included telling the consumer that the agency itself does not know the specific reasons that your application was denied or your fees are higher than average. The last required piece of information on the letter is your rights under the FCRA. You can dispute inaccurate information on your report that may have resulted in the denial, and you are also entitled to a free report.

Time Line

The Fair Credit Reporting Act does not establish a specific time frame for the lender to send out an adverse action letter, only that it must be provided within a "reasonable time frame." In many cases, the letter is received within two weeks to a month after the lender denies credit.

Recourse

If a lender does not provide you with an adverse action letter after denying you credit or taking another form of negative action against you due to information on your credit report, you have the right to sue the lender for failing to follow its obligations under the Fair Credit Reporting Act.

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How to Find My Credit Score Online for Free

According to Experian, one of the three nationwide credit reporting agencies, your credit score "is a number that summarizes the historical credit information." Essentially, the number represents your ability to pay debts on time and gives lenders and credit agencies a rough indication on whether you will default on your payments in the future. Many companies, such as FreeCreditReport.com, boast the ability to provide you with a free credit report. Most of these agencies require you to sign up for some other service. You can obtain a free credit score from AnnualCreditReport.com.

Instructions

1

Log on to the Internet and navigate your browser to AnnualCreditReport.com.

2

Select your state from the drop menu and click the "Request Report" button.

3

Fill in the required information in the text box. You must provide your first and last name, birth date, social security number and current address. This information is secure. The website is sponsored by the three major credit reporting agencies: Equifax, TransUnion and Experian.

4

Click "Continue" and follow the directions on-screen. You will be able to view and print your credit score from the three major credit reporting agencies. You may only do this once every 12 months.

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How Do Landlords Run Credit?

When you fill out a rental application, you are often asked for permission to review your credit history, and landlords will purchase such a report from the main credit reporting bureaus TransUnion, Experian and Equifax. Reports that include other information, including rental history, from specialty consumer reporting agencies are regulated by the Federal Trade Commission.

Specialty Reports

Specialty reports from consumer reporting agencies can include public records of lawsuits, bankruptcies and criminal records. Such agencies may offer "reference checking" services, in which they contact past landlords, and listed residents on behalf of prospective landlords. Some of these reports are available for a one-time fee, while other reporting acengies, such as Lexis-Nexis and Choicepoint, may be available on a subscription basis.

Disclosure

Consumer reports frequently contain errors. If a landlord uses a credit report to take adverse action against a tenant or applicant, they must provide him with the name, telephone number and address of the consumer reporting agency. The notice must include a statement certifying that the agency did not make the decision. It must also contain a notice that the applicant can obtain a free copy of the report from the agency to dispute the accuracy of its contents.

Adverse Action

An adverse action may include turning an applicant down, but it may also include raising the rent to cover a certain amount of risk, requiring a cosigner or requiring a deposit that would not be required of another applicant. Landlords do not have to tell applicants which information contained in the report tipped the scales. Because much of the information contained on the reports is public record, some landlords are savvy enough to perform a background check themselves. They do not have to inform you of the results.

Dozens of Agencies

If you are concerned about errors on a background check, you may review what information they are holding for free. But there are more than 300 members of the National Association of Background Screeners, meaning you may not know where to look because of the sheer number of agencies. The Privacy Rights Clearninghouse recommends by starting with asking the landlord which agency he uses.

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Will Bankruptcy Take Charged-Off Bad Debt Off of My Credit Report?

When a creditor charges off a bad debt, this means that it considers the debt to be unpaid for accounting purposes. You still owe the debt and the creditor can still try to collect it, so you can include charge-offs if you file bankruptcy. However, filing bankruptcy will not erase the charge-offs from your credit report.

Credit Reporting

When you file bankruptcy, accounts that were included are listed on your credit report as being discharged in bankruptcy. However, this does not erase the fact that the debt had been charged off before you filed bankruptcy. Both the charged-off bad debt and the bankruptcy will appear on your credit report and will affect your credit score.

Payment History

Not only does a bankruptcy not erase a charge-off, it also does not erase the payment history that led to the charge-off. You likely missed at least a few payments on your debt before it was charged off, and bankruptcy does not do anything to remove these instances from your credit report. They will continue to affect your score just as they would have if you had not filed bankruptcy.

Time Frame

A charged-off debt will drop off of your credit report before the bankruptcy will. This is because most negative information, including charge-offs, can only appear on your credit report for seven years after the date of the charge-off. Chapter 13 bankruptcy also stays on your credit report for seven years, but Chapter 7 bankruptcy stays for 10 years. Therefore, if you had a charge-off and filed bankruptcy one year later, the charge-off would come off your credit report in six years and the bankruptcy would come off one to four years later, depending on whether you filed Chapter 13 or Chapter 7.

Consideration

If your bankruptcy is discharged before a debt is charged off, you can keep it from being noted as a charge-off on your credit report. Instead, the debt will just be listed as included in a bankruptcy, even if it was days away from being charged off. Therefore, if you are planning to file bankruptcy, you can make an occasional payment on your debt to keep it from being charged off in the meantime.

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How to Negotiate and Pay Off the Key Derogatory on Credit Report

Key derogatory entries on your credit report are negative marks that will remain for seven to 10 years. Items such as charge-offs, collections and foreclosures are reported for seven years. Bankruptcies are reported for 10 years. You can pay off delinquent accounts through a process called debt settlement, which allows you to pay less than the full balance. The New York Times reported in January 2009 at the height of the financial crisis that some credit card companies were settling debts for as little as 20 percent of the balance, but a range of 30 to 70 percent is more typical.

Instructions

1

Obtain a free copy of your credit report from the AnnualCreditReport website or call 877-322-8228. The website is the only Internet site authorized by the government to offer completely free reports. Other sites with similar names may offer a free report but also try to sell you other services.

2

Find the key derogatory on your credit report. Note that bankruptcies and foreclosures cannot be paid off. However, you can address other old debts such as charge-offs and collection items. According to the Federal Trade Commission, charge-offs are accounts that the creditor closed after you stopped making payments; collection items are charge-offs sold to collection agencies.

3

Contact the creditor or debt collection company by telephone or mail. Offer to resolve the debt by paying 20 percent of the balance. Continue negotiating until you have an agreement. Prepare to have several discussions or make multiple counteroffers. Increase your offer in small increments, say 5 percent, each time you counter. Be prepared to offer more for newer accounts. Older debts will eventually drop off your credit report, and the statute of limitations for collection will expire, so the creditor may be more open to accepting a smaller payoff.

4

Get the terms of the settlement offer in writing and send all correspondence by certified mail. The agreement should stipulate that the creditor is accepting your payment and will recognize the account as paid in full and the debt cannot be sold to other collectors. Then send in your payment. Paying the debt will not improve your credit score initially. The entry on your report will be updated to indicate that the account was "settled for less than the full balance," which is also considered a key derogatory and will remain on your record for seven years from the date of payment.

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How to Check for Bad Credit

Knowing your credit score is an important part of avoiding financing scams and shopping with confidence. A good credit rating entitles you to lower interest charges and more financing options. If you have bad credit, however, it is important to be able to identify which aspects of your credit history damaged your credit rating to avoid making the same mistakes in the future. The Fair Credit Reporting Act allows you to pull one free credit report each year to check for bad credit.

Instructions

1

Visit annualcreditreport.com to request your free annual credit report. Annualcreditreport.com is the only website approved by the federal government to provide consumers with free annual credit reports. If you have already pulled your free annual credit report, you may purchase updated copies of your credit records from Experian, Equifax or TransUnion at any time.

2

Review your credit report for negative items. Items that negatively impact your credit rating include late payments, charge-offs, collection accounts and public records such as judgments, bankruptcies and foreclosures.

3

Compare your credit card balances to the spending limit allowed on each card. Carrying a high balance in relation to your spending limit can damage your credit.

4

Check the age of your oldest account. The length of time you have had a credit history accounts for 15% of your overall credit score. Thus, a short and imperfect credit history is likely to result in a lower score than a longer credit history that also contains derogatory information.

5

Pull your FICO scores. Lenders use FICO scores along with the information contained in your credit report to determine your eligibility for financing. You can purchase your Equifax and TransUnion FICO scores directly from the Fair Isaac Corporation, which calculates them by visiting MyFico.com. Unfortunately, Experian does not sell FICO scores to the public.

6

Evaluate your FICO scores. Scores below 620 reflect a poor credit rating.

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How Can You Get a Line of Credit With a Credit Score of 730?

Your credit score can determine a lot of your personal finance choices and a low credit score can be very limiting. Most people and business consider any credit score around or more than 700 to be quite good, though. A score of 730 is well within the good range. With a high credit score, getting a line of credit shouldn't be too hard but you still must do a little bit of preparation and legwork to get a line of credit.

Instructions

1

Gather of your financial paperwork. Even with a good credit score of 730, you'll need to verify that you have a reliable source of income, as well as that you are who you say you are. Gather several of your most recent pay stubs, several forms of ID such as a passport or driver's license, copies of recent utility bills and the last couple of years of your tax filings. Also be sure to have all of your mortgage information. Most lines of credit are tied to a house or other secured item.

2

Get quotes. Call several banks and mortgage lenders to see if they offer home equity lines of credit and what their rates are and how much they lend. You won't need to fill out an application just to get a basic quote.

3

Choose the lender that is best for you. Fill out an application. A lot of the information will come from the documents you gathered and you may need to provide these documents as well. You'll need to decide how much to apply for based on what you need and the bank thinks you can handle repaying.

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If My Spouse Files Bankruptcy & I Am an Authorized User on a Credit Card Does it Hurt My Credit?

Authorized users of credit cards can reap some of the fallout of the cardholder's financial troubles. Fortunately, there are ways to protect your credit, even if your spouse files for bankruptcy.

Authorized User

An authorized user of a credit card is allowed to use the card, but is not responsible for paying the charges. Being an authorized user is different than being a joint account holder, who is equally responsible for any debts incurred.

Credit Reporting

If the primary cardholder doesn't make the minimum payments due on the account, or files for bankruptcy, this information may end up on the authorized user's credit report. This can seriously damage the authorized user's credit score.

Prevention/Solution

Contact the credit card companies and ask to have your name removed from your spouse's accounts as an authorized user. You can also ask the credit bureaus to remove any derogatory information related to the account from your credit report.

Community Property States

In a community property state, spouses share responsibility for marital debts and assets. Spouses of account holders may be held responsible for a credit card debt, even if the spouse was just an authorized user of the card.

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Does Paying Off Charged-Off Accounts Bring Up Credit Scores?

So you were a little -- or very -- irresponsible with your credit in the past. Now, your credit report is littered with charged-off accounts and your credit score's in the trash. Don't wait seven years for those charged-off accounts to drop off your credit report, but don't get in too big a hurry to pay them off, either. While paying off charged-off accounts won't hurt your credit, it won't improve your credit score, either.

Charged-Off Accounts

A charged-off debt is, by definition, a debt that is 120 to 180 days past due. However, for consumers, the term "charged-off" can be misleading. While to the financial world, a charged-off account is one that auditors or accountants have told a creditor to take off the books, because, due to a lack of payments on the debt, it appears that the debt is unrecoverable, to consumers, there is often the assumption that charged-off debt is debt no longer owed. That is not the case. You still owe the debt, but the creditor has accepted the fact that getting payment won't be easy.

How Charge-Offs Affect Credit Scores

There's nothing that brings down a credit score more than paying debts late or not at all. Therefore, by the time a debt is charged off, the damage is done to your credit report; the charge-off is, in a sense, the final blow. The number of charge-offs versus current accounts often affects your credit score more than the charged-off accounts alone. If, for instance, you have four credit accounts, and one is reported as a charge-off, while the others are in good standing, the damage is less than having four accounts, all of which have been charged off.

Paying Off Charged-Off Accounts

Paying off charged-off accounts won't improve your credit score overnight, but it may help you plead your case with potential lenders. "From a credit scoring standpoint, there is not a big difference between a paid or unpaid charge-off," writes Bankrate's Steve Bucci. "However, from the point of view of a lender considering you for a loan or an employer reviewing your credit report as part of the hiring or promotion process, accounts listed as paid can make a big difference."

Using Other Accounts to Make Improvements

If your credit score is trashed due to multiple charge-offs, by all means pay off the charge-offs as you are financially able, but do not rely on paying these debts to improve your credit score. Rather, diminish the effect these old debts have on your credit by creating a better credit history. Pay bills in full, on time. Pay down high credit card balances, and open new accounts sparingly. Given time, your credit score will improve, and those charge-offs will become ancient credit history.

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Does a Credit Check Show Previous Jobs?

Credit checks are checks of any individual's credit report run by parties other than the individual himself. Credit checks may be run by a number of different entities, including lenders, creditors, landlords and employers. The information culled from this credit check, although only related to the person's lending history, may influence decisions about extending the individual credit or another privilege involving trust, such as an apartment or a job. Credit reports do not show previous jobs.

Contents of Credit Reports

Credit reports only show information directly related to a person's lending history. A credit report will list all loans that the person has taken out in the last decade or so, as well as the disposition of these loans, such as whether the person paid them off on time or was late. Because a person's previous employment is not directly related to his credit history, a list of previous employers does not show up on the credit check.

"Soft" Checks

Every time an organization other than a lender checks on a person's credit report, this check is recorded on the credit report itself. Therefore, a check of the credit report can reveal who else has checked the report recently. Many employers choose to run credit checks on employees before hiring them. So, a check of a person's credit report might reveal some of the employers to which the individual applied, but not whether he was hired or not.

Background Checks

Many employers run additional background checks on employees, in addition or in lieu of credit checks. These background checks can take many forms, from a cursory examination of public records to detailed interviews with the candidate's family and friends. While a credit check won't show what jobs an individual has previously held, there are many ways in which a background check can reveal this information. For example, a company conducting such a check might the employers listed on a candidate's resume to make sure the information is accurate.

Considerations

The only way that a person's previous employers could show up on their credit report was if he somehow owed them money. While owing money to a former employer would be strange, it could certainly happen. In such a case, the employer would be listed as a creditor in the report and the relationship between the individual and the employer---the fact that the individual used to work for the employer---would not be revealed.

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How to Improve My Credit Status

Your credit status affects your chances of getting loans, opening new credit lines and applying for anything related to a credit score. A poor credit status leads to a person being deemed as a risky borrower, which decreases their chances of being approved for anything credit related. However, even with poor credit, you can improve your credit status by changing a few credit-related habits. Improving your credit status takes time and patience, but it is certainly possible.

Instructions

1

Pay credit card bills on time. Making late payments on credit card bills negatively affects your credit score.

2

Pay down your credit card balances. Each credit card, as well as your total credit line, should be below 25 percent usage to increase your credit score. Charge only $750 or below on a $3,000 limit card, for example. Pay down all credit cards that carry balances above the 25 percent mark and your credit score will increase.

3

Get rid of credit cards whose issuers don't report your credit limit. Issuers who don't report card limits normally use your highest balance as your limit. This makes it appear that your card is maxed out, which adversely affects your credit rating. Call your credit card issuer to ensure that they report your credit limit.

4

Open new credit accounts slowly. New credit accounts lower the average length of your credit history, which affects your credit score. If possible, avoid opening new credit accounts and just hang onto your old ones.

5

Dispute any incorrect charges. Credit card companies make mistakes, and if you see an incorrect debt on your credit card bill, then contact the credit card company and dispute the charge. Write a simple letter asking for verification of the debt, and credit card companies will double check to make sure no mistakes were made.

6

Transfer balances from near maxed out cards to other cards. This allows for a more balanced credit usage, which raises your credit rating. Most cards allow the transfer of balances.

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How Can I Clear My Credit Up?

A low credit score has a negative effect on your buying power. Even if you qualify for a new loan or credit card, the interest rates and fees the lender charges are often much higher if a poor credit rating makes you a lending risk. While you cannot always clear away adverse information within your credit file before the reporting period on the data expires, you can take action to clear up certain aspects of your report and, in doing so, improve your credit score.

Correct Credit Errors

The information on your credit report was reported to the credit bureaus by your lenders and creditors. If a lender has inaccurate information, it will make an inaccurate report to the bureaus. Upon reviewing their credit records, some consumers even uncover derogatory accounts that belong to other individuals.

The Fair Credit Reporting Act (FCRA) provides you with the ability to request one free copy of your credit report each year. If you find errors within your report, notify both the information provider and each credit bureau of the errors in order to have them promptly rectified. Correcting inaccurate information -- especially if the information is derogatory -- can boost your credit rating.

Send Goodwill Letters

Missed payment notations within your credit history suggest to future lenders that you are a high lending risk. In addition, missed payments severely damage your credit rating. A goodwill letter is a simple written request to the creditor that it amend the negative notation within your file as a gesture of goodwill. Not all lenders acknowledge goodwill letters. Your chances of successfully clearing away negative information with a goodwill letter increase if the late payment in question was an isolated incident or you have held the account for a long period of time.

Dispute Obsolete Entries

The FCRA notes that each entry on your credit report can only remain for a fixed amount of time. Unfortunately, sometimes damaging records linger on consumer credit reports for longer than the legal time frame. Most negative entries, such as late payments, charge-offs and collection accounts, remain for seven years. Exceptions to this rule include bankruptcies, which report for ten years, and tax liens, which report indefinitely until you pay them off.

If you discover obsolete information within your credit history, you can dispute the obsolete data with the credit bureaus in the same manner that you would dispute incorrect information. The FCRA requires the credit bureaus to remove obsolete entries.

Practice Responsible Habits

Clearing up bad credit is not an overnight process. To truly remedy a damaged credit rating, you must practice responsible debt management skills, pay your creditors on time and keep your outstanding debts as low as possible. Because federal law places limits on how long each item can linger within your credit records, practicing responsible habits ensures that your credit rating will naturally increase over time as evidence of your past mistakes disappear, only to be replaced with positive information.

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How Can I Get an Outstanding Credit Report or Score?

Your credit score is one of the things that could make or break you when trying to get a loan, buy a house, lease a car, apply for credit cards, rent an apartment or almost any other major purchase. Once your credit score falls behind, it's not impossible to rescue it, but it will take some time. Depending on how bad your credit score is, it could take years of positive activity before it is restored to an outstanding state. The best path to an outstanding credit score is to keep up and never fall too far behind.

Instructions

1

Pay your bills on time. If you have a credit balance that has to be paid off--loan payments, bank fees, rent or any other obligation--you have to pay them. In most cases, you don't have to pay them in full, but you will have to make some sort of payment. Making a minimum payment will show your lenders that you are making an attempt to pay off your bills. If you make no payment, your credit will get reported to the credit bureau within 30 days. Some companies wait 60 days and others may even wait 90 days. You will have to double check before you want to take a chance. Your best bet is to make a payment before it is 30 days overdue.

2

Buy stuff using credit. The only way to build your credit up is by using it. If you have a credit card, make a plan to buy everything on your credit card, but make sure you have the cash to pay it back at the end of the month. Whatever you would buy in cash, just buy it on your credit card and pay it in full at the end of the month. This will show creditors that you're using a lot of credit, but you can pay it in full when you have to. Eventually, your credit limit will raise and your credit score will go up. Every line of credit you open up can help you build your credit. You just have to make sure you make your payments on time. Once you start making payments well past due, you credit score will go down. Don't open up more lines of credit than you can handle.

3

Don't apply for additional lines of credit if you think you'll be denied. The more times you apply for a credit card or a loan, the lower your credit score can become. Three or four applications is the norm, but once you get up to eight or more applications, your credit score is at risk. Creditors can see how many times you've tried to get credit and denied, and this will eventually hurt you. If you really need some credit, check your credit score before you apply. If your score is above 620, you will likely be able to get most loans and credit cards. If you're below 620, and even more, like below 580, you will get denied by most firms. You will need at least six months of solid activity to build your score back up.

4

Open a checking account. Having a bank account in positive standing for at least six months is a sign of stability for lenders and will help build your credit up. Don't overdraft or bounce checks. If you do, pay them back immediately. Writing good checks, making deposits and withdrawals all help you establish your credit. But remember, none of this will transfer to your credit score overnight. It takes months of excellent standing to get an outstanding credit score.

5

Open department store credit cards. If you frequently visit a couple of stores, look into their credit cards. Having more credit cards will help you have better credit as long as you pay everything on time and don't open up too many.

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What Does R1 Mean on a Credit Report?

A credit report contains a record of your financial accounts and shows how you have maintained those accounts. A credit report contains codes and digits that have meaning. Without knowing what the codes mean, you may have a difficult time reading the credit report.

Why are There Codes?

A credit report contains a large amount of information. All of your financial accounts that have been reported for the previous seven plus years will appear. For each financial account the name of the creditor, balance, high balance, payment amount, type of account, payment history and more is recorded. By using codes, it reduces the amount of text needed.

I Codes

The letter "I" refers to an installment loan.

Any loan that is an installment loan will be marked by an "I." An installment loan is a loan with a fixed payment amount over a fixed number of years such as a mortgage or a car loan.

R Codes

The letter "R" indicates a revolving account.

R codes are used to identify revolving credit. Revolving credit is a type of credit where you have a credit limit and can reduce the balance and charge it back up. A credit card is an example of revolving credit.

Number codes

Along with the R or I code on the credit report you will find a 1 to 9. While it is rare to see a 5, 6, 7 or 8, the codes 1, 2, 3, 4 and 9 are commonly seen. A 1 indicates the payments are made on time. A 2 indicates a payment has been 30 days late. A 3 rating indicates the account has had a 60 day late payment and a 4 indicates the account has had a payment later than 90 days. A 9 -- the worst rating, shows the account has been charged off or referred to collections.

R1 Code

By reading the above information, you can gather that an R1 is a revolving account that has been paid on time.

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