Tips And Treats
Credit Report Tips
Your Credit Report contains a historical record of your personal and financial information including a listing of your current and past debts and the timeliness of your payments. The information contained on your credit report is looked at by many people including lenders, credit card companies, landlords, telephone and cable companies just to name a few. These companies use your credit report to evaluate your reliability and creditworthiness.
Knowing what is on your credit report can save you from unexpected surprises the next time you apply for a loan. Insuring the accuracy of your credit report is also very important. All too often people have found errors on their credit report that were damaging their credit score. Many times people have even been alerted to attempted identity theft by keeping an eye on their credit report.
Last Updated - 10th November 2005
Here is what you can expect to see on your credit report. There are four basic sections to the report which are broken down below:
- Your personal information such as your name, social security number, date of birth, drivers license number, address and telephone number
- Your credit history which contains a listing of all open and closed credit lines including the original amount of the loan as well as the current balance on the loan, the type of loan (credit card, department store credit, mortgage etc.), the status of the loan whether it is active or closed, and the timeliness of your payments
- A public records listing that includes any tax liens foreclosures, bankruptcies or judgments filed
- A listing of inquiries made on your credit report by potential lenders who pull your credit report when considering issuing you a loan or credit card.
If you do find errors on your credit report they can be disputed and corrected. Be aware that this may take some time. That is why it is always recommended to stay on top of things and know what is on your credit report. Being alert and informed will help insure that nothing sneaks its way on to your credit report.
Tips to Improve your Credit Rating
- Set Goals -
- Check your credit report every three months: The first step to robust credit health is to know which bad financial habits, such as late payments, are present in your credit report. Regular check-ups will also help you guard against identity theft.
- Improve your credit score 50 points or to above 650: A credit score above 650 will help qualify you for most credit and loan terms. The higher your score, the better the interest rates available to you.
- Reduce your debt balances to below 35% of the available credit limit: Reducing your balances while maintaining active credit use makes you more appealing to prospective lenders and can help improve your credit score.
- Create a monthly budget and stick to it: This simple commitment can help you start a savings plan and will keep you from building up unmanageable debt.
- Clean Up Your Records -
- Dispute negative inaccuracies on your credit report: Don't let your credit standing suffer because of inaccurate information.
- Remove expired debts and collection accounts: Most negative records expire from your credit report after 7-10 years. These accounts have a significant negative effect on your credit rating, so make sure they are removed from your report at the right time.
- Consider Refinancing: See if refinancing your home or car could save you money. Would it make sense to refinance your mortgage? Investigate your options with a lender.
- Plan Ahead -
- Start putting money into a savings account each month. No matter how much available credit you have, it can't beat cash in the bank. Setting aside a fixed amount each month will guarantee interest-free funds in the case of emergency while helping you develop financial discipline.
- Contribute to your 401(k): See if your company offers matching funds and try to add the maximum amount allowable for your budget.
- Guard against identity theft: To guard against this increasingly prevalent crime, sign up for a credit monitoring service that will quickly alert you to any changes in your report.
Removing Negative Credit
- To dispute a negative item on your credit file you need to first identify the negative items that you want removed.
- Once you know which items to dispute, DO NOT complete the Dispute Forms that the Credit Bureaus included with copies of your credit file that they sent you.
- Be sure to include a copy of your credit file and keep the original for your records. Highlight or underline the items you are disputing. Mail the dispute forms to the address listed on each credit file.
- To dispute an inquiry, simply write that you never applied for credit with that company.
- Make a photocopy of your dispute letter for your records and be sure to send it by Certified and Return Receipt Mail from your local Post Office. Mail your dispute form to the address provided with your credit file. Repeat the above process for each item that you want removed or changed.
- After reviewing your updated credit file and finding that most or all the negative items have been removed, you may now focus on building a positive credit profile. Positive information will always outweigh a few negative items that may remain on your file.
- This technique is extremely effective in removing any negative information that was supposedly verified as correct after your dispute.
- Important: Always remember that if the dispute is sent in from anyone other than you, the Credit Bureau will suspect that you have paid someone to repair your credit. This raises all sorts of Red Flags. Since they make so many mistakes it is imperative that they believe you are working alone and trying to fix a real legitimate mistake.
- If there is a negative item that you want removed from your credit, such as a bankruptcy, charge off or collection account, you may want to write that this is NOT your account and you want it removed immediately.
- If the account is now paid off, but was seriously past due at one time, DO NOT write that it's not your account. Instead, write that it is your account but was NEVER past due and you need it updated to say that everything has always been current.
- An Extremely Powerful Technique...
- This auditing technique is usually only practiced by attorneys. It would be very expensive to hire attorneys to do this for you. However, by following the instructions you'll get similar results as any attorney (you just won't have to pay).
- If the Credit Bureaus were able to verify any disputed information as correct, it would remain on your credit file. So you'll need to contact the creditor who is reporting the information. The creditor who reported the item is listed on the left or bottom of your credit file. If their phone number is not provided, call directory assistance in their city and ask for the creditor's telephone number. Call and ask them to mail you written proof and documentation that this is actually your account, since you do not believe the account belongs to you.
- Almost all creditors and collection agencies use computers to store information about debtors and they throw out original, signed contracts along with other original documents. This makes it easy for creditors to store and organize information BUT makes it impossible to actually prove the account is really yours and not just another mistake.
- Federal Law requires that upon your request, all creditors must show you written proof that the account in question is in fact yours. Written proof is a copy of the contract you signed with the original creditor. As we explained before, you are stored on the creditor's computer and chances are excellent that they have thrown out all the proof that this is your account.
- The only creditors that may have proof are the courts (Recent Bankruptcies, Unpaid Tax Liens, Unpaid Judgments & Unpaid Child Support).
- Again, all Federal Laws are in your favor. If you say an account is not yours and the creditor does not have written proof that the account belongs to you, they must remove the account from your credit file and cease all collection activity. If they don't have written proof that the account is yours, there are two ways to get the item remove
Disclaimer: The Credit Report Tips / Information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of Tips And Treats . com and/or its partners.
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