When you apply for credit, your lender will request a credit report from a credit reporting agency. A credit reporting agency pulls together a credit report electronically. It collects information about your financial transactions and credit history and compiles them into a report that other credit grantors can review. The subscribing companies use the information to evaluate your credit worthiness.
If you have made financial mistakes in the past, it's not too late to start fixing your credit report today. Here you'll discover the little tips and tricks you can use to convince the lenders and creditors you're trustworthy.
The first step to repairing your credit is to check your credit report. You are entitled to one free credit report per year. To get your report, contact the credit bureau that has your file. You are also entitled to a free credit report if you have been denied credit within the past 60 days.
Once you receive your credit report, review it carefully to spot any errors. Inaccurate information, especially if they are in a derogatory status can significantly impact your credit rating and the possibility of qualifying for credit or a loan. You need to make sure that all information is being reported correctly.
You have the right to demand verification of negative information on your report. If you believe some of the items on your report are inaccurate, you should demand that the items be verified.
By law the credit bureau must investigate the matter within the alloted time. If the item cannot be verified it must be removed from your file. The credit bureau must provide you with a free copy of your corrected credit report.
Send your dispute letter to the credit bureau via certified mail, return receipt requested.
If the credit bureau completes its investigation and decides that the negative information should remain in your file, you can add a one hundred-word explanation to refute the claim.
Once you have finished erasing negative items from your report, the next step is to rebuild your credit. You can add positive credit items to your report by taking out a small secured loan or obtaining a secured credit card. You can also build good credit by having someone with a good credit record cosign on your application for a small loan.