Your credit score matters. So much is riding on this little score and it is critical to keep your score as high as possible. If your credit score is high, you will face many benefits. You will qualify for better loans, lower interest rates and financing for cars and homes. This is because creditors trust that you will be able to consistently make your payments. On the other hand, if your score is low you may be faced with high penalties, expensive loans and even rejection. If your credit isn’t where you want it to be, changes can be made. You can repair and fix your credit score if you are ready to put in the effort.

If your credit score carries blemishes, these can really hurt you. It is important to carefully monitor your score looking for errors. Remember that the three major credit bureaus are responsible for monitoring a lot of scores. This means that mistakes are not only possible, they are probable. In 2004 a study was completed that indicated that 25% of credit reports held a major mistake. These mistakes can really hurt you and keep you from getting the loan you are seeking. If you are ready to repair your credit, here is what you need to do.

Look at Your Reports

If you want to fix your credit, you first need to know where to start. The best way to do this is to get in touch with each credit bureau for a score. The three bureaus are Experian, Equifax and TransUnion. Don’t just get one credit report. Each can carry different information and can be used by different creditors so you need to request a copy of all three. One report may have a mistake that the others do not.

Many states require the bureaus to provide a free credit report to each person on a yearly basis. If your state requires this, you are in luck. If not, you may still have a few options. If you have been denied a loan, you may qualify for a free report. Additionally if you have evidence that negative feedback may be on your report, you may also qualify. Look into your options and find out if you can get a free report. Remember that even if you need to pay, the fee is small especially if you order the most basic report.

Study and Look for Problems

Once you receive your reports, you need to carefully analyze them. Be on the look out for errors. Here are some common mistakes to keep your eyes out for:

• Credit Limits Too Low: Your percentage of debt to credit affects your score. Compare the reported limits to the actual limits to ensure that your credit score is as strong as possible.

• Accounts You Haven’t Opened: If you have accounts on your report that aren’t yours, get this corrected. These accounts may look like you carry more debt than you actually do. This can hurt your chances of getting a loan in the future.

• Negatives (late payments and judgments): Negative items can quickly damage your score. Look at all negatives and make sure that they are accurately reported.

• Delinquent Accounts: Look at any delinquent accounts and make sure that they are accurate.

• Old Negatives and Bankruptcies: Negatives should be removed from your credit report after 7 years. If you still see these on your report, get them corrected as they will be impacting your score. Bankruptcies take longer to leave your score and should be on for no longer than 10 years.

• Delinquent Accounts Affected by Bankruptcy: If you filed for bankruptcy, delinquent accounts should be eliminated. If they are still marked as unpaid, get this corrected.

Also look at your account for negatives that may be able to be removed. Here are a few possibilities to watch for as this can really help your score.

• Negatives Associated with Positive Accounts: If you have a couple of late payments on an account that has been otherwise good, you may be able to get these removed. Contact your creditors and talk with them. You may be able to get them to help you out.

• Older Negatives: If you have older negative items, you may be able to contest them and get them removed. Credit card companies may not bother to contest claims on older accounts which can result in a much better score for you.

Get Rid of Errors

If you find errors, it is in your best interest to contest them. This will help your score. Send the credit bureau with the error a letter outlining the mistake. Include any documentation that you can find including photocopies, written explanation and more. You need to be able to prove that the letters were sent, so always get a mailing receipt when you correspond with the credit bureau. Keep copies of everything.

Once the credit bureau receives your complaint, they will contact your creditor. The creditor will have 30 days to verify your dispute. If they do not, the item will be removed. Keep checking your reports and make sure that the errors you found are in fact removed. If the problem isn’t quickly corrected, try sending a letter to your creditor and ask them to correct the error.

Removing Accurate Negatives

Your credit report may be accurate, but if there are negative items, you should still try to get them corrected. Correcting these problems will help your report to go a little higher. Sometimes there are a few negatives that you can get removed if you go about it correctly. Pay special attention looking for negatives on good accounts and negatives on old accounts.

Negatives on Good Accounts: If you have a good account in good standing, your creditors may be willing to help you out by removing a negative payment or two. Send a well written letter to the company with your request. Keep copies of your correspondence and make sure to get a return receipt. If you don’t have success the first time you ask, wait a little while and try again.

Older Negative Items: Many times if you dispute old negatives directly with the credit bureau, they will not dispute and the items can be removed. Simply dispute the item saying that the item is an error.

Turn a New Leaf and Handle Your Credit Better

If you really want to start over and take control of your credit score, you need to plan ahead and think about how you will change your actions. You may not be able to change the past, but you can start positively for the future. These are some great changes to make if you really are ready to take control of your credit score.

Keep Debt to 50%: You need to keep your debt to 50% of your available credit. Don’t max out cards. And strive to keep control of your balances.

Hold Onto Cards: Try to keep around 3 credit cards open at all times. This is a good number to hold onto. If you have too many cards, your credit score will be negatively impacted. Additionally not having enough cards can also be a problem.

Keep Older Cards: Once you pay off cards, you may want to close a few accounts. Make sure you keep your oldest cards open as these are beneficial in showing long term accounts and credit history.

Don’t Get Loans Unless You Must: New debt and carrying too much debt can hurt your score. If you have enough credit, stop applying for new cards.

Your credit score is important. If you haven’t been taking care of it, it is time. Pay attention in the future and do what you can to repair your score as much as possible. Time corrects problems, so if you can’t get negatives removed, remember that good actions in the future will help your score to grow.

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