Clean Up Your Credit Report
By Ronnica Rothe
Your report is used by lenders to determine whether you are a fit candidate for a loan. If you want to buy a house or car in the future, now is the time to start working on
cleaning up your report. Obtain a free copy of your report and look it over to see what the creditors use to determine your eligibility for loans.
There are probably both positive and negative items on your report. The positive items, such as staying current on your accounts, being employed, and having checking and saving accounts, will stay on your report indefinitely. You want these items on your report because they help to counteract whatever negative items you have. There is no need to act to have them removed. However, if you see that you are missing accounts that you have good history with, even if it is simply a small store card, you should contact the creditor to get them added to your report.
If you have made any financial mistakes in the past, they are probably present on your
credit report. Negative items such as card defaults, repossessions, foreclosures, and chapter 13 bankruptcies will remain on your report for seven years. Chapter 7 bankruptcies will stay on your report for ten years, while any unpaid tax liens will stay on your report for fifteen years. These items remain because creditors want to see what risks they may take on when lending money to you.
If negative items have remained on your report beyond the limits specified above or if they are inaccurate, it is time to dispute them with the bureau. You will need to do so with each of the bureaus individually if the item existed on all three reports. Disputing items has been made simple and can be done easily when pulling your free report. You should expect to hear back from the bureau in about a month. When you receive the documentation on what corrections were made, check to make sure that the problem has been completely taken care of. If the report is still not quite accurate, you can do a second dispute by personal letter. Explain the problem fully, providing documentation to back up your case. Make sure to keep copies of all correspondence with the bureaus.
If you have defaulted on a card or other loan, you may want to talk to the creditor to negotiate a deal to get your account up to current. However, if you do not plan on paying the debt, do not contact the creditor because it may restart the clock for having the item dropped from your report.
There are several other steps you can take to build your credit. Open a checking or savings account with a bank or union. If you have enough self-discipline not to rack up debt, get a card and use it sparingly, always paying off your balance in full each month. Using responsibly can go a long way to proving that you are capable of handling larger purchases.
It is a good idea to
target="_blank">check your report on a yearly basis to make sure that everything is doing well. Take advantage of the free yearly reports from each of the three major reporting bureaus. If you have further questions on how to build or clean up credit, talk to a counselor.
Article Source: http://www.articles-galore.com
Ronnica Rothe is a graduate with honors from the University of Oklahoma and a current student at Southeastern Baptist Theological Seminary. She works with Personal Financial Network to help individuals get out of debt and reach their financial goals.
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