Don’t fret if you got a bad credit report – change it! Here’s how to raise your credit score and stop it from destroying your applications for your credit cards, mortgage loans, and more.
“Your credit score not only affects your interest rates on a mortgage or auto loan, but credit reports also might be viewed by prospective landlords, employers and insurers,” says Ethan Ewing of Bills.com. “The credit report often is the first indicator that identity has been compromised by fraud or theft. It is important to monitor your credit report at least yearly to be certain it reports accurate information about your use of credit.”
If you want to fix a bad credit score, read How to Repair Your Credit Score Now: Simple No Cost Methods You Can Put to Use Today.
And, here are Ewing’s tips for fighting a bad credit score report…
Follow the guidelines of the three major credit agencies (Equifax, Experian or TransUnion)
The federal Fair Credit Reporting Act requires that credit bureaus provide a procedure for consumers to dispute inaccurate listings on their credit reports. Follow the guidelines provided by each of the three credit reporting agencies on their websites. The easiest way to file an effective dispute letter is online. If a consumer disputes an item with one of the three major agencies, the bureau will notify the creditor that the item has been disputed. The creditor then has 30 days in which to respond to that dispute. The Federal Trade Commission also offers a free guide to disputing credit report errors.
Wait for the creditor’s response
If the creditor provides substantial evidence that the item is valid, then the listing will remain on the report. If the creditor cannot substantiate the item, then the credit bureau is required to remove it – and you’ve successfully fought a bad credit score report. And, you might want to learn how to protect your credit score.
Watch your credit score report
If the creditor does not respond to the credit bureau within 30 days, then the credit bureau is required to remove that listing from the consumer’s credit file (though this period can be extended by 15 days under certain circumstances). However, even after an item has been removed, if the credit bureau receives information from the creditor substantiating the listing, the credit bureau can replace the item on the consumer’s credit report.
To learn more about credit reports, read 10 Facts About Credit Scores.
File a complaint with the Federal Trade Commission
If a credit reporting agency refuses to remove a listing that is truly invalid, even after the consumer has provided substantial evidence, the consumer can file a complaint with the Federal Trade Commission and with his or her state’s Attorney General’s office.
To raise your credit score, go back to step one
Occasionally, a debt will reappear even after a consumer has successfully disputed it and had it removed. This may happen if a debt is sent to a collection agency that begins reporting the item to the bureaus again. In that case, the consumer must dispute the item all over again.
“The bottom line is that consumer credit reports include whatever information creditors or collectors report to the credit agencies,” says Ewing. “Unfortunately, that sometimes includes incorrect information. Monitoring your credit is your responsibility. Take that responsibility seriously, and you also take charge of protecting a valuable, intangible asset — your credit rating.”
If you want to use your credit card for serious financial rewards, read How to Use Your Credit Cards Rewards Program for Realistic Rewards.