Steps on improving your credit score and credit report?

Answer 1

For most people, the concept of repairing your credit means disputing the negative items in your credit reports in order to get the credit bureaus to remove them. Removing the items on your credit reports that are depressing your credit score in turn causes your credit score to improve or become repaired.

The most basic form of credit repair is the credit bureau dispute. As a component of the Fair Credit Reporting Act, all consumers have the right to dispute with the credit bureaus any items on their credit reports that they feel are incomplete or inaccurate. In response to disputes the credit bureaus do not deem to be "frivolous or irrelevant", the credit bureaus are required to conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate. If after the reinvestigation has been completed the disputed listing is found to be inaccurate or incomplete or cannot be verified, the credit bureau is required to modify or delete the disputed item from the consumer's credit report.

All three credit bureaus provide online forms for disputing your credit reports. In addition, you have the option to mail dispute letters to each of the credit bureaus. Many experts suggest mailed disputes for documentation purposes.

A second credit repair tactic and an extension of the credit bureau dispute is to work with the creditors who are reporting to the credit bureaus. In many instances, it is possible to successfully request that creditors stop reporting negative credit or change they way they are reporting a particular item to the credit bureaus in order to improve the appearance of the item on your credit reports. In cases where the creditor is reporting incorrect information, your rights under certain consumer protection laws such as the FDCPA and the FCBA give you tools to force the creditor to correct or remove any inaccurate listings.

For many people who do not have the time to learn about and participate in the dispute process, there are a number of legitimate credit repair organizations who will manage the process for you. The majority of these organizations will learn from you which items on your credit reports you would like to dispute and then go through the process of crafting and sending dispute letters to the credit bureaus and to your individual creditors. Many companies also offer credit score coaching to advise you on other steps you may be able to take to improve your credit score.

Credit repair companies are an easy way to dispute the information in your credit reports and many clients of these companies have experienced very satisfactory results. But as with any service, be sure to take the time to properly research any credit repair organization before providing them with your personal information.

Largely to combat the fraudulent tactics of some credit repair companies, the Credit Repair Organizations Act (CROA) was enacted to legislate the industry. The CROA laws detail specific operational practices that credit repair organizations must abide by. These practices are in place to help you avoid becoming a victim of a credit repair scam.

When shopping for a credit repair company, watch out for any company that tries to collect money from you before rendering any services, guarantees specific results such as a 100 point credit score increase, does not allow you to cancel the service at any time, and does not inform you of your right to repair your credit on your own.

In addition, watch out for any company that offers to create a separate credit file for you. This process, known as "file segregation" is illegal and could end up getting you in trouble as well as the offending credit repair organization.

Because the above methods of credit repair focus solely on removing negative credit from your credit reports, these tactics have become known as credit report repair. In addition to credit report repair, there are other tactics you can use to improve your credit score.

Depending on your credit situation, these tactics may include paying down high credit card balances to improve your current level of indebtedness, diversifying your credit portfolio, ensuring that good credit is being reported, strategically refinancing loans, and so on.

Understanding your credit score and how it is constructed will help you to determine which of these steps you should take to improve your credit score. There are four factors that affect your credit score. Be aware of credit repair companies online or in your local area who promise you something that is completely false or fabricated. There are alot of credit repair companies that are only there to take advantage of you.