10 Tips To Improving Your Credit Reports

Credit is something that some take lightly or give little thought to until it’s really needed. There are 10 things that you can do to make sure that your credit is always in good standing so it will be available when needed.

1) Pay your bills on time. A consistent history of timely payments will greatly improve your credit profile and will, therefore, make you more desirable to lenders. In many cases, a strong payment history in your credit reports will also result in better interest rates.

2) If possible, pay your bill in full every month. This will help to save you money in finance charges, especially credit cards with high interest rates, and will make your credit reports even stronger.

3) Avoid carrying a balance of more than 50% of your total credit limit on any credit card.

4) If you notice any incorrect information on your credit reports, dispute it in writing with the credit bureau immediately. You may also find it helpful to contact the creditor directly, notify them of the incorrect information and ask that they correct it with the credit bureau and on each of your credit reports.

5) If you have recently filed for bankruptcy, start rebuilding your credit with either a secured credit card or one that is known to be bankruptcy-friendly. The latter often requires higher interest be paid, but your credit score will begin to rise after three months of a steady payment history is listed in your credit reports.

6) If you have old accounts that are listed as being open, but are actually closed, call the creditor and send a letter to the credit bureau. Often times, creditors simply never report an account as being closed with the credit bureaus. If you have a lot of available credit on your report, potential lenders may wonder why you need all of this open credit and what your plans are for it’s use. A large number of apparently open accounts with a zero balance may put you in the high risk loan category if the lender suspects you plan to increase your debt load substantially with your unused credit.

7) Avoid excessively applying for credit as this may lower your credit score because of multiple inquiries.

8) Use your credit cards for necessities only and avoid spending more than you could repay within six months.

9) If your credit cards have excessively high credit limits that you never plan to use, call the creditor and ask that they reduce your credit limit to an amount that you are comfortable with. This will not only reduce the temptation of overspending, but will also prevent potential lenders from seeing that you have a lot of available credit and suspecting that you plan to go into serious debt.

10) The best way to improve your credit reports is to review the information filed with each of the three major credit bureaus every six months. These include TransUnion, Experian and Equifax. A free copy of credit reports can be obtained every 12 months at AnnualCreditReport.com

3 Free Credit Reports For You

If you were to tell someone that they can have a certain item for free, more than likely their response would be, “what’s the catch?” In the case of credit reports there is no catch, you can now get a free copy of this report through the three credit reporting agencies: Equifax, TransUnions, and Experian. Let’s take a look at the law and how you can benefit from it.

An amendment to the federal Fair Credit Reporting Act (FCRA) requires the three national credit reporting agencies to provide one free copy of your credit report to you annually. Beginning on December 1, 2004 and culminating on September 1, 2005, the Federal Trade Commission is requiring that these agencies offer reports on a rolling, phase in basis. In other words, on December 1, 2004, if you live in certain western states you became eligible at that time and every three months later additional states were added. By September 1, 2005, residents of all states are eligible.

Fortunately for consumers, you need not contact the three reporting agencies separately to obtain your free credit report. You can order right online at www.annualcreditreport.com; or by calling 877-322-8228; or by completing the Annual Credit Report Request Form and mailing it:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

The form is available online where you can print it out and mail it in: www.ftc.gov/credit.

If you need copies more often, you can contact the three reporting agencies and request copies. You will pay for this service.

To buy a copy of your report, contact:

Equifax

800-685-1111

www.equifax.com

Experian

888-EXPERIAN (888-397-3742)

www.experian.com

Trans Union

800-916-8800

www.transunion.com

There are also private companies who will obtain all three copies of your credit report for you as well. There is a fee involved, but you may find their services to be less of a hassle than contacting the three companies separately.

So, how can you benefit from the law? By ordering copies of your reports from the companies on a four month rotating basis. Most consumers will find this plan to be sufficient and it will allow for you to compare/contrast the reports of each agency. Of course, if you already suspect fraud you will want to order all three reports at once and notify each agency to place a "fraud alert" in your credit file.

All in all, the new law is a big win for consumers. Take advantage of this "windfall" as soon as you become eligible to do so.