It seems that almost everyone has had to contend with a low credit score at some time or another and right now it is more common than ever due to the recession in the economy. You can have a great credit score and be late on just one monthly payment and your credit score can plunge as much as 100 points. Most people don’t have any clue how credit scores are measured or how they can increase them.
Credit scores are based upon a composite of a few different considerations. Of course, it is somewhat based on if you make your payments in a prompt manner but there are other things too. One of the most critical things that the credit bureaus look for is the difference between how much credit you have accessible and how much you are using. If your credit cards and credit lines are maxed out at the limit your score is considerably reduced.
When you are looking at your credit keep in mind that the best credit scores are attributed to the people who use only 30% or less of their accessible credit limits. You can raise your limits or pay down your balance to get below 30% but of course the easiest thing would be to never go above the 30% mark in the first place. Having available credit but not using it is a element of a good credit risk.
Long-term credit is given more weight than short-term credit. If you have an older credit card that you haven’t used much, begin using it but make sure that you do not go over the 30% rule and of course, be diligent in making your payments. It is always wise to carry a zero balance on a credit card if that is possible for you.
You can dispute any negative information that is shown on your report. The Federal government enacted the Fair Credit Reporting Act to defend consumers from erroneous credit information. After you file a dispute the bureaus and the creditors must prove the validity of the information within a short period of time. If they fail to do so then the information must be removed from your report.
It is estimated that as many as 40% of all disputes are not verified within the allotted time period of 30 to 45 days. This gives a definite advantage to you as a consumer and you should use this to your benefit as you try to repair your credit.
As you start disputing the negative information on your reports make sure that you keep accurate and complete records. Send all correspondence via certified mail and make sure you have accurate dates. Also make sure you send a separate letter for each dispute.
It may take time, energy and determination to repair your credit but it can be done. You have the right to repair your credit and it is worth every effort.
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