People do not find themselves thrust into a credit problem situation overnight. While it’s fine to dream, one cannot correct a defective credit report in a few days or weeks. Yet, there are proven methods to improve a credit score that are straightforward and relatively easy to employ. Here are five tips that will increase a score and improve a report in three to six months.
How to Accomplish Credit Repair
- Get a copy of the credit report. There are only three primary, national credit reporting agencies (Equifax, Trans Union, and Experian). Many people have no idea what is really reported to these agencies. They also don’t know that they have the right to obtain one credit report every year for FREE. To save time and postage, just go to a website like annualcreditreport.com to order a free credit report.
- Examine the credit report and try to spot any obvious errors. Lenders submit a huge volume of data to these credit reporting agencies every month. This leads to errors, mispostings, and incorrectly reported accounts. Since all lenders, with massive data bases, report electronically, errors are transmitted and auto loaded into credit files absent any proofing, error checking, or human examination.
- If there are errors, immediately contact the credit reporting agency(s) involved and ask that the bad information be deleted or corrected. They must investigate the issue and correct or delete the data as soon as they get confirmation from the reporting party. Should the agency hear nothing, which often happens, they must delete the disputed item. The credit score immediately increases.
- Start paying all accounts on time. It matters little how much one pays, as long as it meets the minimum payment standards set by the credit card company or other lender. Just make sure the payments are on time, as agreed, so a “30 day late” status is not generated.
- If the report is overloaded with unsecured credit (plastic cards, personal loans, etc.), try to improve the “mix”, including an installment loan (auto, boat, etc.) or two, and, of course, a mortgage loan, if possible. The credit score will increase since the debtor is not merely an unsecured warrior, but has more substantial loans, too.
Perform a Personal Credit Check and Be Patient
Over time, these simple actions will continue to improve a credit score. This is where the patience factor becomes critical. This is not a magic potion, but a proven action plan guaranteed to generate a better credit score. But remember, this process (except for immediate deletions of derogatory information) will take at least three to six months to fully cycle the desired result.
It takes time for lenders to receive and post your payments. Further time elapses until the next reporting cycles. Only then can creditors provide updated data to the three credit reporting agencies. Also, since a single on time payment does not immediately impact a credit score algorithm, three or four payments should be made to make a real positive difference. This establishes a better pattern or trend of responsible money management, which will positively affect the credit score software.
 |
