Your credit report isn’t just for loans anymore! Job offers, promotions, security clearances, and insurance quotes are now routinely affected by your credit report or other types of consumer reports.
Follow these steps to rebuild and improve your credit.
Request Current Credit Reports
You’re entitled to a free credit report from each of the three credit bureaus, Experian, Equifax, and TransUnion, every twelve months under the Fair Credit Reporting Act (FCRA), and more often if you are the victim of identity theft or on public assistance. Request your credit report regularly and check that all information is accurate.
Address Any Credit Inaccuracies
Credit report errors are fairly common. If there is inaccurate information on your credit report, it’s important that you address it. Write and dispute directly with the bureaus. Include a current copy of the report with your dispute. It will be helpful to highlight the disputed item. Your dispute letter should briefly state why this item is listed incorrectly. Attach any supporting documentation that illustrates your claim. Send your letter to the credit bureau by Certified Mail, Return Receipt. The bureaus have 30 days to respond to your dispute. If the bureaus don’t correct the error, you may need to send a second dispute. Be sure to keep copies of all dispute correspondence.
Pay Bills in Full and on Time
Falling behind on payments will have a negative impact on your credit history. Always pay your bills in full and by the date listed on the statement or invoice.
Review Current Accounts
Pay down balances on existing credit cards or loans and pay off delinquent accounts. Be strategic about closing cards; consider keeping cards that you’ve had for a long time that show a consistent payment history and consider closing those with high interest. You should only maintain credit accounts that you can afford.
Maintain Stable Employment
A lapse in employment history can harm your credit. A high debt to income ratio will also negatively impact your credit history.
Do Not Max-out Credit Cards
Part of your credit score is based on your credit utilization, or the percentage of your available credit you use. Never use the maximum amount of available credit. Doing so will hurt your credit score. It’s best to not exceed fifty percent of your available credit.
Do Not Co-sign Loans
When you agree to cosign on a loan, you are liable for payment of the loan, despite any side agreement you may have with the other borrower. If the borrower defaults, you will be responsible for making payments. Co-signing brings a significant risk that you likely don’t want to take on as you rebuild your credit.
Building Credit Takes Time and Discipline
Remember that you must be responsible with credit. Always pay on time and maintain the terms of the credit agreement.
Seek Legal Help
Flitter Milz is a consumer protection law firm that represents victims with credit reporting problems, harassment from debt collectors, and wrongful vehicle repossessions. Whether you fell behind on payments or not, the credit bureau, debt collector and lender must follow the law. Contact us for a free legal review to determine whether your consumer rights have been violated.