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4 Steps to Improving your Credit Score

Author: RobKosberg Total views: 2 Word Count: 654

Though the mistakes people make in handling their credit is well documented no one argue that good credit is vital. A good credit score is a stepping stone to many advantages in wealth creation. Here are a few credit basics to improving or maintaining your score.

Step 1: Determine what needs Improvement? Your first order of duty is to determine exactly what derogatory and incorrect items show on your credit report. There are several ways to accomplish this but the easiest is simply going directly to the source. There are 3 credit bureaus that creditors use. They are as follows; www.equifax.com, www.transunion.com, and www.experian.com.

Make sure that you order your reports from these three bureaus and not go to any free credit report offer. Many times you will find that the report is not free and they do not offer your score either. They are primarily interested in upselling you into some sort of monthly credit monitoring plan.

When you receive your three reports take the time to review each one individually. Each credit repository reports your score based on a different matrix and some creditors do not report to all three bureas. Make note of any item that is reflecting as late or is listed as a public record.

Step 2:Dispute the issues. Make sure that when you dispute the incorrect and derogatory items that you do it by hand written letters in your own words. Do not use the standard bureau forms that are provided. The employees at the bureaus are real people trained to be on the look out for credit repair companies and false disputes. You will get a better response by taking the time to personalize things.

Do this with all inaccurate information on your report. It is not very hard to do and can raise your score very quickly. If the credit account in dispute is yours, and it is currently an open account, then you should contact that creditor directly. Many times a creditor will remove derogatory items at the request of a current client. In some cases putting pressure on the creditor by threatening to close your account will get them act quickly on your behalf.

Step 3: Wait it out or pay it off. Something to be aware of is that almost all derogatory credit "falls off" a report after 7 years. If you have credit issues that are old you may be better off waiting for those to come off by themselves rather than investigating them. The 7 year waiting period is from the last activity on the account. I have seen credit situations that reactivated because a dispute was issued on an old item. If this happens and the item is found to be valid then your score will drop and the clock will reset for 7 more years.

One trick, so to speak, is to be sure to keep your available balances at no more that 50% and better yet 30%. You can see a quick improvement of your score if you are able to transfer a balance onto a card that is at zero and have two cards at 30% of available rather than one at zero and another maxed out.

Step 4: Be cautious in establishing new credit and especially don't close old accounts. It's important to know that one of the major contributing factors in your credit score is the length of time that credit has been established. Older accounts, even ones you've not used, will positively effect your score. Newer accounts will skew the average and lower your score.

By applying the strategies I've outlined here you can fix or maintain your credit. In some cases, working with a credit repair agency is worthwhile but before you do these simple steps can put you well on your way to excellent credit.

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About the Author

If you are in the market to Buy a Home then check out Rob Kosbergs' Detailed FREE Report on Buying your Dream Home with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog

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