It is important to improve credit score since this means you can receive better loan terms in the future and lower interest rates. However, such an advantage is only viable when your credit score is good. When credit score is low, you have to deal with worse terms.
Repairing your credit score is tricky. It can take time and the big problem is that most people start the process when they need a loan and they realize they cannot get it. This is why you should repair your credit as soon as you notice a problem. The methods presented below will help you to do exactly that.
Review Credit Reports
The large credit bureaus are forced by low to offer a free report once per year. You just need to ask for it. You can also use third-party services that give you access to the reports.
The reason why you want to check your credit reports is that there might be some errors that exist and that can be repaired. Analyze every single entry. When you spot one that is incorrect, report it. This would remove the inaccurate entry and your credit score would be increased.
Start by analyzing collection accounts or judgments. For instance, your healthcare provider might not have received payment from your insurance provider so your credit score might have been affected. Such an error can easily be fixed.
Dispute Late-Payment Credit Report Entries
The mortgage lender might have reported a late payment when the truth is that it was paid on time. This tends to happen much more often than you might think. Also, credit card providers might not enter payments correctly.
Once again, look at the report. See if there are late payments that are incorrect and dispute them. Keep in mind that payment history is a very important factor that does weigh heavily on the final credit card score.
Dispute Some Collections
Some negative correct information on your report can also be disputed. For instance, maybe an account went on to be collected since you did not make the necessary payments. The collection agency decided to give up but the entry does remain on the report. What you can do is dispute this. The credit bureau will try to find out what happened from the collection agency but in many cases, the agency will not respond. If this happens, your credit score will go up.
Ask For A Removal
You tried to remove late payments or negative comments and failed. This does not mean that you should give up. You can actually always ask nicely.
Keep in mind that creditors have the power to instruct the credit bureaus to simply remove credit report entries. As an example, let’s say you have a credit card that you have never used for a year. However, at the end of the year, you were charged the annual fee. This might lead to the situation in which you end up with late payments without even knowing about it. When you see it, you can contact your credit card company. You can explain the problem and if you were a good customer for a long time, the entry might end up being removed.