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How You Can Raise Your Credit Score If It’s Low

 

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How You Can Raise Your Credit Score If It’s Low

So you’re one of the 220 million Americans who have bad credit – resulting in a low credit score that has rendered it nearly impossible to secure a loan at decent interest rate you can afford. But don’t despair. There is hope for repairing the damage and restoring your credit.

Credit reports are used in a variety of ways and by a number of different agencies. Credit card companies, utility companies and financial institutions all use a person’s credit report to determine financial stability. Even employers are jumping on the credit-reporting bandwagon, using a potential employee’s credit report as part of the hiring process.

The recent recession also has created quite a credit crunch for those with bad credit histories. As part of new financial legislation, banks and other financial institutions were required to write off record numbers of debt in order to comply with the law. Unhappy with losing out on the ability to collect on that debt, financial institutions have gotten a lot pickier about to whom they lend money, closely scrutinizing credit reports and scores prior to agreeing to do business with a particular lender.

So what do you do if you suspect your credit score is keeping you from excelling financially?

The first thing to do is to request a copy of your credit report from all three credit reporting agencies. Equifax, Experian and TransUnion are the three credit-reporting agencies that compile financial histories on consumers in the United States. The Fair Credit Reporting Act indicates that every consumer is entitled to one free credit report annually. You can opt to receive one from each of the credit reporting agencies, or from just one of them. Because each agency collects data differently, it may be wise to request a report from each of the three agencies.

Once you have your credit reports, pore over them carefully, checking for any discrepancies or outright errors in your financial history. A common reason for misinformation on a credit report is that another individual shares a name similar to yours, and their information has accidentally found its way onto your report. Another reason for errors can be identity theft. If there are accounts listed on your report which you do not hold, it is important to dispute them with the credit reporting agency, and immediately request that a fraud alert be placed on the accounts in question.

If there are no mistakes on your report and you simply have bad credit due to past financial indiscretions, there are ways to help repair the damage.

  • Pay bills on time. Failure to pay on time or at all can have a serious negative impact on your credit report. It is best to make small payments rather than to forego them at all. Complete avoidance can result in a collection agency taking over your account, which is detrimental to your credit score.
  • Low balances are best. Many consumers erroneously assume that racking up huge sums on credit cards is the best way to “build” credit. The exact opposite is true. If you already are struggling with paying off debt, running up large amounts on credit is never a good idea.
  • Don’t apply for new credit. Every time a consumer applies for a new credit card, their credit report takes a “hit” and their credit score lowers a bit. It also is wise not to close credit accounts which you aren’t using for the same reason. It is better to leave them open without balances than to close them.

Lastly, do not be afraid to seek out the help of a reputable consumer credit counseling service, which may be able to help you reduce your payments so that you can begin to pay off all debt owed, rather than simply moving it around. TopConsumerReviews.com has reviewed and ranked the best credit repair services available today.

I've Been Trying to Get My Free Credit Report Online. It's Basically Hell.

While Kevin's on vacation, we've invited other Mother Jones writers to contribute posts. Some of you probably saw my post about the frustrations I encountered trying to freeze my credit with the Big Three. From the feedback, it sounds like some of you ...

Published:  Sat, 23 Sep 2017 03:00:00 GMT



How Belgium deals with credit without Equifax, Experian, and TransUnion

Credit reporting in the U.S. has been dominated by three companies, Equifax, Experian, and TransUnion, yet many people don't even realize that these companies are compiling massive files on them. And now that there's been a breach, they don't like it.

Published:  Fri, 22 Sep 2017 14:57:00 GMT



Fed Chair Janet Yellen warns: Monitor your credit report!

Federal Reserve Chairwoman Janet Yellen on Wednesday warned millions of Americans to scrupulously monitor their credit reports following a "very serious data breach" at Equifax. "We would really urge consumers to be very careful in monitoring their credit ...

Published:  Tue, 19 Sep 2017 22:51:00 GMT



Herbert Lin: Credit reporting protections are backward

In the wake of the hack of credit reporting agency Equifax, many people have suggested that affected consumers implement credit freezes to prevent the misuse of their sensitive personal data. Equifax, which originally tried to charge consumers for this ...

Published:  Fri, 22 Sep 2017 23:45:00 GMT



How to Unfreeze Your Credit Report

In the aftermath of the Equifax breach, many experts and pundits are recommending Americans to freeze their credit reports. Freezing your credit report can be a good move to help protect yourself from someone stealing your information, opening accounts and ...

Published:  Wed, 20 Sep 2017 15:42:00 GMT



Clear collections from your credit report

Your credit score takes a hit if you fall behind on payments to a creditor, and again if an account is sent to the creditor's collection department or sold to a third-party collector. You may be able to repair some damage to your scores by resolving a ...

Published:  Wed, 20 Sep 2017 13:46:00 GMT



The Knowledge Group Has Scheduled a Live Webcast on The Fair Credit Reporting Act: 2017 Trends, Developments and What Lies Ahead

New York, NY, September 23, 2017 --(PR.com)-- The Knowledge Group/The Knowledge Congress Live Webcast Series, the leading producer of regulatory focused webcasts, announced today that it has scheduled a live webcast entitled: The Fair Credit Reporting Act ...

Published:  Sat, 23 Sep 2017 00:01:00 GMT



Consumer Reports: When and when not to cancel your credit card

(Consumer Reports)--Cutting up a credit card can feel liberating especially if you've spent years diligently paying off the debt. However, Consumer Reports says there are times when you might not want to cut that card out of your life completely.

Published:  Thu, 21 Sep 2017 01:00:00 GMT



Report: Equifax hacked months earlier than previously admitted

The credit reporting agency learned about the breach five months earlier in March, Bloomberg reported, citing three sources familiar with the hack, but in a statement, the company denied that the computer breaches were related. One of Bloomberg's ...

Published:  Wed, 20 Sep 2017 16:03:00 GMT



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