Bad Credit Score? Learn How To Raise It
One of the most important parts of a loan application is your credit score. The loan officer will be looking closely at your credit; the credit score is a reflection of how you have handled credit in the past or whether you have had any credit before. All too easily, however, the information shown on your credit score represents false data. Making sure that the information in your credit file is correct is vital to maintaining a higher credit score and being offered better loan rates.
The first step is to obtain a free copy of the credit reports from each of three primary credit reporting agencies: Equifax, Experian, and TransUnion. It is necessary to get all three reports because each of them are based on different databases and a mistake on one report may not be recorded on another. The lender is likely to look at all three scores; therefore, the savvy borrower should as well.
After receiving the free credit reports from the three agencies, a line item review is required. Look at every reported incident, especially those that negatively impact the rating. These obviously include reported defaults and late payments, but also look to make sure all outstanding loans and credit accounts are listed, that the available credit listed is correct and so on. All these factors play a role in the overall scoring.
With the monumental task of collecting and sorting credit data and then entering it into the companys database it is not surprising that mistakes get made. The difficulty increases with common names and when people do not review their credit files regularly.
If you find mistakes and false information you can appeal the information by contacting the reporting agency. The main credit reporting agencies have websites that will have a claim form available on them that will make resolution of the problem easier. To make your claim move forward smoothly it is a good idea to include any documentation that will substantiate what you are saying and why you think it is incorrect. It is important to frequently look at your credit reports; getting old information removed is much easier than having new data removed or corrected.
Once the claim is initiated, it usually takes 30 days for the agency to investigate the matter. Depending on the results of the investigation, the item may or may not be removed. It is not uncommon for lenders to fail to respond after a claim has been initiated. If this happens, the bureaus are required to remove the information from your credit file.
Vincent Polisi is the founder of Finance the Dream which offers houses for rent to own and Lease Options throughout the United States. To find out more about how they can help you find the home of your dreams-even with bad credit, please visit them at financethedream.com. To learn more about rent to own homes, please visit his blog.
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Tags: credit, credit repair, credit report disputing, credit tips, finance, mortgage, Mortgage loans, personal finance
