Strategy #2: Fix Errors
Once you have the report, look for errors. Correct all information that is wrong. Common things to look for are:
- Social Security Number
- Address changes or incorrect
- Bankruptcy older than 10 years
- Delinquencies 7 years or more.
- Debts that are not yours.
- Duplication of accounts.
Whether you are on line, or off line (paper), you challenge the information and ask them to correct errors. The Fair Credit Reporting act gives them 30 days, once notified to correct or confirm the information as correct.
Strategy #3: Understand the Fair Credit Reporting Act
Commonly called the FCRA, the report gives a series of rules and guidelines for credit reporting agencies.
You can get a free copy of the act, at www.ftc.gov
There are hard enquires on your credit report and soft enquires. In fact the act specifies 8 legal reasons to access credit reports, many based on you giving permission to a company for to check your credit for a job, loan, credit, insurance or reference. That would be a hard enquiry.
Individuals cannot randomly access your report. You have to give them permission.
A soft enquiry is usually an update, or you checking on your own credit (not for a specific loan, or service). Does not reduce or change your credit rating.
To many enquires, for example getting 4 credit cards (loans), at one time, would reduce your credit
Strategy #4: Not Using your cards
Most folks do not realize, NOT using your credit cards, will make it difficult to build a strong credit history. Even worst, is NO credit. Many vendors, look at people with no credit as bigger risks, than folks with marginal credit ratings.
Using your cards, will build comfort that you can handle credit. And lead to bigger credit increases.
It is my opinion, support by a lot of data and success stories, that CREDIT (GOOD Debt), can lead to wealth. The more you are able to borrow, the greater likelihood you can have assets, that can grow or pay income. An example, an apartment complex.
15% of your score is based on use of credit. Therefore use it…. Wisely.