Your Credit Score Is A Three- Digit Number

Category: Finance.

There are laws that enable individuals to do something about a poor credit report.

All it takes to repair your credit score is to communicate with the credit bureau contesting the errors. They can question any section of the report that they disagree with. The steps to correcting a bad credit report are not difficult. This way, the credit repair process can go smoothly. Because it is essential to have good credit, you must systematically take measures to notify the credit bureau of an error and then provide evidence. The Fair Credit Reporting Act( FCRA) gives you the right to contest any mistakes in your credit report. This happens frequently with individuals who have common names like Tom Jones where there are hundreds of Tom Jones in the same state and across the nation.

Some of these mistakes are caused by a simple case of wrong identity. If one Tom Jones defaults on a mortgage payment, that could be registered in your credit report even if you ve never missed a mortgage payment. You can contact the credit bureau in writing and point the mistake to them with supporting documents. These clerical errors are frequently committed. If you have a receipt from the bank for that mortgage payment you made, attach it to your letter. Go to the FICO web site. Make sure you follow up with the credit bureau to see if they ve adjusted your credit report by eliminating that erroneous entry.

While you re entitled to a free credit report every year, you may have to pay to obtain your actual credit score. If your score is 720 and higher, count yourself lucky. Your credit score is a three- digit number. Below that and you got some" fixin to do. " Don t be discouraged if you get a low score. You can get an idea of the type of interest rates you d be charged based on your credit score. Millions of others do, but they re able to set the record straight or rebuild their tarnished credit reputation with vigilance and discipline.

The FICO web site has a section on interest rates. If you were looking around December 2007, the applicable interest rate would have been 799% . This is what we found: supposing you had a good credit score( 720 and up) and you wanted to apply for a home equity loan, term 15 years. That rate jumps to 144% if your credit score was around 500- 57See how a good credit score can help a lot? The beautiful thing about credit is that you can re- build it. If your bad credit score is entirely your fault, don, again t despair.

It may take time but with restraint your credit standing will recover. Here are some repair credit strategies for you: while you re in the process of repairing your credit score, stay away from any applications for additional loans- be it for a car, a revolving line of credit, a personal loan. This is why it s essential to use credit( a) only when you need to and( b) when you do, use it wisely. This is because any application you make for a loan gets registered in your report; pay all your bills on time- it s very tempting to skip payments because people know they won t get thrown into jail for one or two skipped payments. That s almost the equivalent of remaining in a locked cell; like everyone else, you have a limit of how much you can use from a revolving line of credit. But think of it this way: a skipped payment will lead you into a situation where you ll feel trapped and be cash- strapped.

If your bank offers you say, overdraft protection of up to$ 1, 000, stay within that limit; you may want to think about consolidating all your debts. Ask your financial planner if it s time to bunch up all your loans into one. Maybe paying different interest rates is beginning to disturb you. With consolidation, you pay only one, not multiple rates; why not pay cash for everything you buy from now on? Time to turn on the public relations person in you. Keep that credit card at home so you re not tempted to reach out for it; communicate often with your bank officer or loan officer.

Let them know about your financial plans, show them you care about your credit standing. Credit is sacred. Maintain regular contact- who knows, your banker may just increase your line of credit even if your credit report is not so outstanding. If you have a bad credit score, don t wait to get it repaired. Insist on a correction. Keep your receipts and send copies off to your credit bureau, if you need to submit proof. You owe that much to yourself!

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