In previous articles, we’ve talked about what a credit score is, and the factors that can affect it. The good news is that there may be factors affecting your credit score that are not your fault, and you can take steps to improve your credit score.
Here’s how to get started, in five easy steps.
1. Look Out for Scams
The first thing to keep in mind is that there’s no such thing as a magic fix for your credit score. Anyone offering credit repair, or a new credit identity is likely making promises they can’t keep, or may be involved in identity theft. You can improve your credit report, but it takes time, effort, and a willingness to adjust how you look at debt and spending.
2. Get an Accurate Credit Report
The first step in correcting your credit score is having a full understanding of what is affecting your credit score. While services like creditkarma.com can offer a snapshot of your credit, it shouldn’t be treated as a primary resource.
Instead, visit annualcreditreport.com, or call 1-877-322-8228 to request a copy of your credit report. This report is provided by the three major credit reporting companies Equifax, Experian, and TransUnion, and you are legally entitled to a free copy of your report from these agencies once every twelve months.
3. Look for Errors
While credit reports attempt to create an accurate picture of your credit history, mistakes can happen.
The Consumer Financial Protection Bureau recommends that you look for the following potential errors on your credit report:
These may be errors made to your identity information such as a wrong name, phone number, address. They may also reflect accounts belonging to another person with the same or a similar name as yours or incorrect accounts resulting from identity theft.
Incorrect Reporting of Account Status
This may involve the credit agency showing closed accounts reported as open, or it may reflect that you are reported as the owner of the account when you are actually just an authorized user.
Accounts Incorrectly Reported as Late or Delinquent
These include errors showing an incorrect date of last payment, date opened, or date of first delinquency, or the same debt listed more than once.
Data Management Errors
Reinsertion of incorrect information after it was corrected, or accounts that appear multiple times with different creditors listed. This is especially in the case of delinquent accounts or accounts in collections.
These may be accounts with an incorrect current balance or incorrect credit limit listed.
Take the time to look for these errors. Even if all the information reported is correct you will undoubtedly walk away with a clearer understanding of your finances.
4. Request a Review
This is where you can take action for yourself. There is no charge to dispute mistakes or outdated items on your credit report. Both the credit reporting company and the information provider (your bank, mortgage lender, credit card company, or another creditor) are responsible for correcting inaccurate or incomplete information in your report.
When reaching out to a reporting agency, you should be ready to tell them in writing, what information you think is inaccurate. The Federal Trade Commission provides a sample letter to help you get started, and an effective review should:
- Include copies (NOT originals) of any supporting documents.
- Identify each item in your report that you dispute and the facts and the reasons you dispute the information.
- Request that the incorrect information be removed or corrected.
- Be sent by certified mail, “return receipt requested,” so you can document that the credit reporting company got it.
Legally, credit reporting companies must investigate within 30 days, unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the information provider.
Once that happens, the information provider must also investigate, and report the results back to the credit reporting company.
If the investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide credit reporting companies so they can correct it in your file.
5. Talk to a Certified Credit Counselor
Ready to improve your credit score? Working with a certified credit counselor can help. We can help you organize your finances and help you to have the tools you need to submit a successful review.
Want to learn more? Schedule a free counseling session today or call us at 800-920-2262.