There’s only one way to discover “health”of your credit. You need to examine your credit report. Your credit report is your “consumer identity” that potential lenders will use to judge your credit worthiness.
Use these tips to give your credit profile “tune-up” it needs:
Tip #1- Check for Errors
Your credit report or profile is more than just a collection of who your creditors are and how much you owe them or have paid them.
The first thing you need to do is carefully check that your credit report is accurate. Nearly 70% of credit reports contain errors.
These errors may be as simple as an incorrect middle initial or address. Or it could be as serious as a creditor reporting that you were late with a payment when in fact you were not late at all.
This error might not seem like a big deal to you. However,to a future lender like a mortgage company it makes a big difference!
Carefully examine your credit report and if you find an error contact your creditor and credit bureaus. Catch and correct these errors now before it hurts your chances of securing credit in future.
Tip #2 - Correcting Errors
The two most common errors contained in credit reports are: 1) wrong account information 2) incorrect recording of late payments.
If you find an account reported that does not belong you, you need to contact credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft.
Hopefully you’ll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when they report an account belonging to a family member or someone with a similar name on your credit report.
If your problem is an error in reporting a late payment you will need proof to back up your case before this error can be corrected or removed. The most common error occurs when a payment is reported as “late” when it was actually a current or “on time” payment.
In either case, problem can and should be corrected. You will need to correct error in writing. Keep a journal or log of all calls and correspondence.
The Fair Credit Reporting Act (FCRA) requires credit bureaus and agency reporting information to credit bureau to correct inaccurate information in your credit report. Therefore, it is important that you contact both credit bureau and creditor whose information is in dispute.