Once a year you should review your credit report.  Since you already have your financial documentation out, tax time is the perfect time to review your report.  If you have never reviewed your credit report then you may have many items that need to be disputed.  Taking the time to fix your credit report may take quite a while the first time.  But once your report is correct and accurate you can check your report once a year confidently.

You can get a free copy of your credit report at annualcreditreport.com once a year.  This is truly a free copy of your credit report.  Other web sites tell you that you can get a free copy of your credit report if you sign up for their monitoring service.  Using a monitoring service is not necessary unless you do not want to monitor the work yourself.

Once you have a copy of your credit report highlight any errors that you see.  Make a list of any errors by the individual credit bureaus (Equifax, Experian, TransUnion).  Write dispute letters to each credit bureau listing 2 or 3 items per letter.  Keep disputing until all items on your credit report are deleted or corrected.  This will take more time if you have never disputed before.  Do not be discouraged if you have never done this before.  Your credit did not get that way overnight and you certainly won’t get it fixed overnight either.  It may take from six months to one year to get your report completely accurate.  An accurate report is critical to having a great credit score.

Now that your credit report is accurate you can start building up your credit.  Simple things like paying your bills on time and in full will help your score continue to rise.  Then by reducing your revolving (credit card) credit, your credit score will continue its upward path.  Having installment loans such as car payments or mortgages will also help your score but they must be paid on time every time.  It is best to setup automatic payments on your credit cards and installment loans so that you never have a late payment.  Late payments make up over 30% of your credit score.  Even if you set up automatic payments to only make minimum payments then you go back and pay however much more you want at least your payments will never be late.

 By using tax time to remind you that it is credit report time you can stay on top of any problems that might appear on your credit report.  Good credit is vital in today’s economy and having errors on your credit report will hurt your credit score.  If you need someone to assist you in disputing errors on your credit report don’t be afraid to hire a professional.  There are legitimate credit repair companies out there who can help you.

There are some simple yet effective ways to help your credit score.  Once you have updated your credit report and got the report as accurate as possible then begin the following suggestions.

1.       Have a major credit card.  Gas cards and department store cards can help build your credit but without a major credit card you will have problems getting into the 700 plus scores.  Major credit cards include Visa, MasterCard, Discover and American Express.  If you don’t have a major credit card then you need to get one.  If your scores won’t qualify for a regular card then you need to look into a secured card.  A secured card will require a deposit into the issuing bank.  Verify that the bank and the card will report to all three credit bureaus.  Additionally, try to get a card that can be converted to a regular card after so many on time payments.

2.       Make payments for every credit card and loan on time.  The best way to confirm that is to make arrangements for automatic payments.  By setting up automatic payments you will never make a late payment again.  You also can setup automatic payments to take the amount you specify, either the minimum payment, a set dollar amount or the balance in full, every month from your checking account.

3.       Never let an account go to collections.  You dispute any amount on a bill then communicate with your creditor.  Because if you have an account that goes into collections you will have a negative mark on your credit report.  The best way to handle it is pay the account and take it to small claims court.  If you have accounts that go to collections and then become judgments against you will really hurt your credit score.  These may take up to seven years to no longer affect your credit score.

4.       Reduce your debt.  pay large portion of your credit score is based on how much of your available credit are you using.  The credit bureaus use a formula that likes to see large gaps between your available credit and your balances.  The scores will improve dramatically when you pay down your credit card debt.  So having a small balance on several cards better than a big balance on one card.

5.       Monitor your balance on your credit cards.  Even if you pay your cards off in full each month that may not be the balance being reported to the bureaus.  By monitoring your credit report you can determine on each credit card what number is being reported as your balance.  For example, if you have a credit card with a $10,000 limit and you charge $8,000 to the card then pay the complete balance in full, the credit card company may report your balance as $8,000.  This would show that you are using 80% of your available balance.

6.       Use less of your available credit for better scores.  Keeping your credit card balances below 30% is good for your credit score.  But getting your balance below 10% of your available credit will help you even more.  Using several cards is better than using one card for everything.  Additionally, make payments on your credit cards prior to their statement date.  Because this will lower your balance that is being reported to the credit bureaus.  You can also set up a automatic payment just before the due date to avoid any late fees.

These are just a few suggestions to help you improve your credit score. Having a good score is very important today with the current economy. Getting some help to correct your credit report can help you get on track more quickly. Don’t be afraid to hire someone to assist you in getting your credit report accurate. We can all have good credit if we want and work hard to do things properly.

Many Americans are struggling with low to average credit scores.  But the good news is that you can improve your credit scores.  Having a credit score above 740 means hard work and diligence but is obtainable by everyone.  You must decide how hard you want to work for that goal.  Hard work and being meticulous is the only way to raise your credit score.

If your credit score is below 740 then you will have problems with the following:

·         Insurance companies – setting premiums and evaluating applicants.

·         Getting an apartment – landlords and management companies check credit on applicants.

·         Employment – employers today check credit to protect themselves from employees with troubled finances.

·         Buying a home – without good credit buying a home will become almost impossible in today’s economy. 

But you can be taught proper techniques to improve your credit score.  In America, 50% of all Americans have a credit score below 720 and 50% of all Americans have a score above 720.  Only 13% have scores above 800 according to Fair Isaac, the company that created FICO scoring. 

You can have a good credit score if you are willing to work hard for it.  Here are some basic tips to help you:

1.       You can’t fix your credit score if you don’t have control of your finances.  This means can’t pay your bills you can’t fix your credit.  Fixing your credit will have to wait until your financial problem is resolved.  You must be bringing in more money then you have in expenses.

2.       You must use your credit if you want to raise your score.  If you are living on cash only then you can’t raise your credit score.  Your credit score tells lenders how you manage your credit.  If you don’t use it then your credit score will never go up.

3.       You don’t have to carry a balance to use your credit.  Many people who have achieved 800 plus credit scores do not carry a balance and pay off their balances regularly.  Charging items to your credit card and paying them off completely each month will help you build your credit score.

4.       Your credit score did not get this way overnight and certainly can’t be corrected overnight.  Once you begin to reduce your debt then you will notice improvement in your scores within 30 days.  But if you have serious problems such as bankruptcies or foreclosures, you may have to wait until those negatives are deleted from your credit report. 

Dispute any items on your credit report that are not yours or any reports of late payments when you paid on time.  Any information over seven years old except for bankruptcies should also be disputed.  Any accounts listed that were included in the bankruptcy should be reported that way but if they are not dispute them.  The seven year clock usually begins 180 days after the account went delinquent.  By correcting your credit report and working hard on following the tips given to improve your credit, you should say improvements in your credit score.