Improving Your Credit Report

Your credit score has a lot to do with many aspects of your life, from how high your insurance premiums are, to how much interest you'll be charged on personal loans and credit cards - even to whether you'll get a particular job. Unfortunately, the credit bureaus take what your creditors say about you as gospel. But don't worry. You can take steps to improve your credit report.

Once each year, every consumer in the United States is permitted to request a free credit report from each of the three major credit bureaus: Transunion, Experian, and Equifax. You should do this at the same time every year, and compare the three reports.

Many factors affect your credit report, including your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of each account. Starting now, make sure you pay all of your bills on time, every month. That will go a long way towards improving your credit score.

If you find anything that looks inaccurate to you on any of the reports, send a dispute, in writing, with copies of any documents that support your position. The credit bureau then has thirty (30) days to investigate the disputed information. If the bureau finds that the information is inaccurate, it will be deleted from your credit report, and the other two bureaus will be notified to do likewise.

Another way you can dispute information in your credit report is by contacting the creditor who reported the information you wish to dispute. You may be able to negotiate with the creditor to get the information updated on your report.

If you're falling behind in your car payments, you may want to think about selling the car and paying off the remaining balance rather than waiting for it to be repossessed. At least you will avoid a negative entry on your credit report, and you can look for a more affordable car.

Getting your credit report every year can also help you become aware of and deal with identity theft. If you discover that you've been victimized, you can place a fraud alert on your credit reports and review them for theft-related information. This can greatly reduce the damage to your credit that identity theft can cause.

Most importantly, once you have your debt under control, don't let it get out of hand again. Start a savings plan that you can stick with and pay cash whenever possible. Only use credit when absolutely necessary, and you will be well on your way to a healthy, higher credit score.