Clean Up Your Credit Report in 4 Simple Steps

Your credit score is an all-important number that has a huge impact on your ability to buy big-ticket items like cars and houses. Lenders also rely on your credit score when determining the interest rate you’ll have to pay on small personal loans.

In short, if you want to use credit, you need a good score.

So What’s Your Number?

Don’t worry, we don’t want your credit card credentials. We’re talking about your score.

If your score isn’t the greatest or there are issues with your report, you may have to clean up your credit report. This is doable in 4 simple steps! Let’s dig in.

1. Request Your Report

The first step to cleaning up your report is to find out what it says. There are three major credit reporting agencies that keep track of this information. These are Transunion, Experian, and Equifax.

You are entitled to a free report from each of them once a year. That means you can request your report 3 times per year for free. Get in the habit of taking advantage of this.

Furthermore, because of the COVID situation, the agencies are allowing you to access your report for free once a week instead of once a year. As of this writing, this access has been extended until April 2022. This is to allow people to keep a close eye on their credit reports when they might be struggling to pay their bills and scammers are rife.

2. Examine Your Report

Once you get it, take a close look at your report. Make sure that all your personal information is correct. Then, take a close look at your accounts, balances, payment history, payment limits, and everything else. Compare them to your records to ensure accuracy.

It is especially important to look closely at bankruptcy or collections data as these can have a significant impact on your overall score.

3. Dispute Discrepancies

If you notice any discrepancies, take immediate action. Open a dispute with the agency that has incorrectly reported the information. You can do this easily online or through snail mail.

When your dispute is resolved positively, the law requires the reporting agency to report to the other two credit bureaus. You can send them notice too if you prefer to ensure everything is dealt with correctly.

If the dispute is not resolved positively, you can file a written statement explaining the circumstances. This will be included in your report.

4. Pay Down Debts

If you carry a lot of credit card debt, now is the time to focus on paying that down. Lowering your credit utilization ratio is an excellent way to quickly improve your score.

Credit utilization is how much credit you use in comparison to how much credit you have available. Keeping your credit utilization ratio under 10% will give your score the biggest boost. As an example, if you have $10,000 of available credit, you’ll want to actively use less than $1,000.

Keep It Clean

Why clean up your credit report? With a clean report, you can enjoy access to more credit options, lower interest rates, and better loan terms.

Interested in more financial advice? Check this article – How I Got My Debt Under Control To Start My New Business.

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