There's only one way to discover the "health"of your credit.
You need to examine your credit report. Your credit report is
your "consumer identity" that potential lenders will use to
judge your credit worthiness.
Use these tips to give your credit profile the "tune-up" it
needs:
Tip #1- Check for Errors
Your credit report or profile is more than just a collection of
who your creditors are and how much you owe them or have paid
them.
The first thing you need to do is carefully check that your
credit report is accurate. Nearly 70% of credit reports
contain errors.
These errors may be as simple as an incorrect middle initial or
address. Or it could be as serious as a creditor reporting that
you were late with a payment when in fact you were not late at
all.
This error might not seem like a big deal to you. However,to a
future lender like a mortgage company it makes a big difference!
Carefully examine your credit report and if you find an error
contact your creditor and the credit bureaus. Catch and
correct these errors now before it hurts your chances of
securing credit in the future.
Tip #2 - Correcting Errors
The two most common errors contained in credit reports are:
1) wrong account information
2) incorrect recording of late payments.
If you find an account reported that does not belong you, you
need to contact the credit grantor or issuer immediately.
Remember, finding accounts that you have not personally opened
is a sign of possible identity theft.
Hopefully you'll discover that this error is nothing more than
an oversight and not an identity theft problem. Most often
this occurs when they report an account belonging to a family
member or someone with a similar name on your credit report.
If your problem is an error in reporting a late payment you
will need proof to back up your case before this error can be
corrected or removed. The most common error occurs when a
payment is reported as "late" when it was actually a current or
"on time" payment.
In either case, the problem can and should be corrected. You
will need to correct the error in writing. Keep a journal or
log of all calls and correspondence.
The Fair Credit Reporting Act (FCRA) requires the credit
bureaus and the agency reporting the information to the credit
bureau to correct inaccurate information in your credit report.
Therefore, it is important that you contact both the credit
bureau and the creditor whose information is in dispute.
A sample letter is included here to help you in correcting your
credit profile. Make sure that you clearly identify the
information that you dispute, include copies of receipts or
documents that support your position. Then request that the
information be corrected or deleted from your file.
Send your letter by certified mail and request a return receipt
from the recipient. Keep all correspondence that you mail out.
Give the agencies involved 30 days to begin their investigation.
You can call them but be aware that phoning them does not
protect your consumer rights! You must notify them in writing
to protect your rights.
They must notify you of the results of their investigation.
Although the process will take time, it's important to do it.
This is your credit profile, your "consumer identity" that is
at stake. Don't expect an error to correct itself.
At your request, the credit bureaus must send notices of
corrections to your credit profile to anyone who has requested
your report in the last six months. If you applied for a job
and were turned down because of inaccurate information in your
credit report, you can have the corrected report mailed to
anyone who received a copy in the past two years.
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Sample Dispute Letter
Date
Your Name
Your Address
Your City, State, Zip Code
Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file.
The items I dispute are also encircled on the attached copy of
the report I received. (Identify item(s) disputed by name of
source, such as creditors or tax court, and identify type of
item, such as credit account, judgment, etc.)
This item is (inaccurate or incomplete) because (describe what
is inaccurate or incomplete and why). I am requesting that the
item be deleted (or request another specific change) to correct
the information.
Enclosed are copies of (use this sentence if applicable and
describe any enclosed documentation, such as payment records,
court documents) supporting my position. Please reinvestigate
this (these) matter(s) and (delete or correct) the disputed
item(s) as soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing)
Originally Posted at http://www.ftc.gov/
++++++++++++++++++++++++++++++++++++
Tip #3 - Budget Planning
You can also use your credit report to help you plan and
implement a personal budget. Your credit report will show you
where you are spending your hard earned dollars. While the
credit card balances may not be completely current, you'll
still see which of your cards has the highest balance
outstanding.
If you have more than one major credit card you should compare
the annual percentage rate (APR) you are paying on each
account. If you are working on a budget to "pay down" your
credit cards, start by paying down the one with the highest APR
or interest.
Once that credit account is paid off, move toward paying off
the account with the second highest APR. Using this method you
will be able to concentrate your efforts toward paying down your
outstanding credit obligations.
You should also check with your credit card company to see
what's the best annual percentage rate (APR) they can offer
you. If you are a good customer, you can often qualify for a
lower rate than what you are currently being offered.
Caution: Ask if the new rate you are getting is a
"promotional" rate or a "contract" rate. A promotional rate
will expire at the end of the promotional term, for example 6
months. A contract rate does not have an "expiration" as long
as you continue to meet the terms outlined by your creditor for
that rate.
Tip #4 - Making a major purchase
If you are considering a major purchase such as a car or a
home, checking your credit report gives you the chance to see
what a potential lender sees and uses to judge your credit
worthiness.
You want to make sure that your credit report is accurate
before you apply for that sports car or new home. Errors or
problems can be corrected before your lender can use those
against you and deny your credit request. You'll also have a
better idea of what type or rate of credit you should expect
from a potential lender.
Tip #5 - Check your credit report regularly
Check your credit report regularly. Guard your "consumer
identity" as you would anything else you treasure. Use your
credit wisely, along with these tips, and you will enjoy the
benefits that your good credit and your good name deserve now -
and for years to come.
The online loans websites offer services of loan officers' help for preparing a credit report. Don't worry, if you've bad credit loans, they can help you to resolve the issue. Even, in case of small business loans, you can make up a lot by checking your credit report. The internet home loan bank not only serves those seeking loan for their new homes, but also supports somehow to those seeking the car finance loans.
