Your credit rating is a determining factor in the rate and term of most consumer loans that you may seek. Your own personal rating is based on your past financial history. Do you pay your bills on time? Have you ever defaulted on a loan? How much of an outstanding balance do you have on credit cards? All of these factors and more can affect your credit rating.
1. Finding out your credit rating.
The first place to start is by determining your current credit rating. There are three primary agencies that report on and track credit ratings. You can obtain a copy of your credit report by writing or calling these organizations.
Equifax Credit Information Services, Inc.
P.O. Box 740241
Atlanta, GA 30374-0241
1-800-685-1111
(To report a fraud on your credit report call: 1-888-766-0008)
Experian National Consumer Assistance Center
P.O. Box 949
Allen, TX 75013-0949
1-888-397-3742
Trans Union Consumer Relations
P.O. Box 1000
Chester, PA 19022
1-800-916-8800
2. Review your credit report for errors.
Review your credit report for errors. Do you see something on your credit report that looks inaccurate? Errors and inaccuracies can be challenged by filing a written request with the credit agency reporting the erroneous information and by also contacting the company claiming the debt. The credit agency will then contact you to review your case. If you have anything that supports your claim, it always helps to file copies of supporting documentation along with an Affidavit. Never send your original documents, always retain them for your records.
3. Improving your credit
The best way to improve your credit is by making timely payments on existing loans and obligations. It is also important not to over extend yourself by running up credit card debt that is greater than your ability to repay. Negative events in your financial history stay on your credit report for approximately seven years. Improving your credit requires establishing a bank account (maintaining a positive balance) and then making timely and regular payments on your financial obligations. These obligations can be a new or existing credit card, a utility bill, or a car payment.
4. Using a secured credit card to improve credit
Sometimes your credit situation prevents you from qualifying for a regular credit card. In this case there is a special type of credit card designed for people trying to improve or repair their credit. These cards are referred to as "secured credit cards". They require putting down a deposit that functions as a type of pre-payment and reduces the risk to the financial institution that you will default on your debt.
