Did you know that if you are late on even one payment it can reduce your credit score by as much as 100 points? Most people really have no idea how credit scores are measured and how they can be repaired and increased. Unfortunately, low credit scores are more frequent than ever and the current recession in the economy has just made it worse.
Credit scores are based upon a combination of a few different considerations. Of course, it is partly 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 substantially reduced.
If you want to increase your credit scores make sure that you are only using 30% or less of any accessible credit lines, especially credit cards. If you have a higher credit limit yet you are using very little of it you are considered to be a better risk.
Long-term credit is attributed more consideration than short-term credit. If you have an older credit card that you haven’t used much, start using it but make sure that you do not go over the 30% rule and of course, be prompt on your payments. It is always smart to carry a zero balance on a credit card if that is possible for you.
You have the legal right to dispute any negative information found on your credit report. The Fair Credit Reporting Act was enacted to protect consumers from erroneous information on their credit. When you file a dispute the bureaus and the creditors must prove the validity of the information within a short span of time. If they cannot or do not prove the validity within the allotted time period then the information must be removed from the credit report.
The creditors and the bureaus have 30 to 45 days from receipt of your dispute to verify the accuracy of their reporting. However, the advantage you have, as a consumer is that it is estimated that as many as 40% or all disputes are never verified. That means that up to 40% of all disputed information is deleted from the reports. You can use that fact to your advantage.
Make sure that you keep meticulous and detailed records of your disputes. Make sure that every piece of correspondence is sent by certified mail and you have all of the receipts along with copies of the disputes. Do not dispute more than one item per letter. Send separate correspondence for each negative mark.
It will take some organization and determination to repair your credit but you can do it. You have the legal right to dispute any negative information and you should do everything you can to repair your credit. It will definitely be advantageous to your financial future.
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