Credit Repair Tips – How to Review and Clean Your Credit Report
Posted in Finance on 05/07/2010 01:08 am by
Chris Rutherford asked:
Your credit score has a big impact on everyday financial situations such as: What interest rate you pay on a credit card, whether you can rent an apartment, whether you have to pay a deposit with your utility company, whether you can qualify for a home loan, and maybe even a potential employer’s decision to hire you. Going through life with bad credit can be very challenging.
Getting a Copy of Your Credit Report
You can’t fix bad credit without knowing what’s in your credit report first. You need to get a copy of your credit report from all 3 credit bureaus: Experian, Trans Union, and Equifax. You can request a copy of your own credit report for free once a year.
Reviewing Your Credit Report
It may not be fun, but reviewing your credit report line by line at least once a year is very important to identify any errors or issues that you may not be aware of. Pay special attention to “derogatory” (or negative) items such as late payments, collections, and charge-offs – they lower your credit score, sometimes significantly.
First, make sure your name, birth date, and current address are showing correctly on the report (in the “Personal Information” section). If not, make a note to correct them with the credit bureau(s). Make sure you check every account listed on your credit report:
Verify the account status is correct – you may discover old accounts you thought were closed that still show up as “open”. If you have accounts left open that you’re not aware of, they may be hurting your ability to apply for new credit or raise the credit limit on accounts you are using. Look at each account in detail (account number, credit limit, date opened etc.) and make sure it is really YOUR account. Someone else could have a similar name and their account might be mixed up with yours. Or worse, someone may be stealing your identity to open accounts in your name, leaving you with the unpaid bills. If you recently refinanced and/or paid off a mortgage or credit card account, check to make sure the account status (“paid, closed”) and current balance ($0) are reflected in the credit report. Note that there will be some delay (30-60 days) in updating your report.
Too many inquiries (requests for your credit history made by other people) can hurt your credit score. Review the “Inquiries” section in your credit report and make sure you know who asked for your credit file and why. You should either already have an account with the inquiring entity, or have authorized their credit check in some way (e.g. by applying for a new bank / credit card account or loan).
Understanding Your Rights
Remember, you have the legal right to know what’s in your credit file, and you have the right to dispute incomplete or inaccurate information. By law, the credit reporting agencies must correct or delete inaccurate, outdated, incomplete, or unverifiable information from your credit history, usually within 30 days.
Therefore, reviewing your credit report at least annually is critical to maintain the accuracy of your credit information. You can raise your credit score by disputing any errors or outdated negative information (more than 7 years old, or bankruptcies more than 10 years old).
Eugene
Your credit score has a big impact on everyday financial situations such as: What interest rate you pay on a credit card, whether you can rent an apartment, whether you have to pay a deposit with your utility company, whether you can qualify for a home loan, and maybe even a potential employer’s decision to hire you. Going through life with bad credit can be very challenging.
Getting a Copy of Your Credit Report
You can’t fix bad credit without knowing what’s in your credit report first. You need to get a copy of your credit report from all 3 credit bureaus: Experian, Trans Union, and Equifax. You can request a copy of your own credit report for free once a year.
Reviewing Your Credit Report
It may not be fun, but reviewing your credit report line by line at least once a year is very important to identify any errors or issues that you may not be aware of. Pay special attention to “derogatory” (or negative) items such as late payments, collections, and charge-offs – they lower your credit score, sometimes significantly.
First, make sure your name, birth date, and current address are showing correctly on the report (in the “Personal Information” section). If not, make a note to correct them with the credit bureau(s). Make sure you check every account listed on your credit report:
Verify the account status is correct – you may discover old accounts you thought were closed that still show up as “open”. If you have accounts left open that you’re not aware of, they may be hurting your ability to apply for new credit or raise the credit limit on accounts you are using. Look at each account in detail (account number, credit limit, date opened etc.) and make sure it is really YOUR account. Someone else could have a similar name and their account might be mixed up with yours. Or worse, someone may be stealing your identity to open accounts in your name, leaving you with the unpaid bills. If you recently refinanced and/or paid off a mortgage or credit card account, check to make sure the account status (“paid, closed”) and current balance ($0) are reflected in the credit report. Note that there will be some delay (30-60 days) in updating your report.
Too many inquiries (requests for your credit history made by other people) can hurt your credit score. Review the “Inquiries” section in your credit report and make sure you know who asked for your credit file and why. You should either already have an account with the inquiring entity, or have authorized their credit check in some way (e.g. by applying for a new bank / credit card account or loan).
Understanding Your Rights
Remember, you have the legal right to know what’s in your credit file, and you have the right to dispute incomplete or inaccurate information. By law, the credit reporting agencies must correct or delete inaccurate, outdated, incomplete, or unverifiable information from your credit history, usually within 30 days.
Therefore, reviewing your credit report at least annually is critical to maintain the accuracy of your credit information. You can raise your credit score by disputing any errors or outdated negative information (more than 7 years old, or bankruptcies more than 10 years old).
Eugene