Having a good credit score is becoming more necessary than ever in order to get approved for a small business, home or personal loan. Although it can be difficult, there are several different ways to legally improve your credit score, according to the Federal Trade Commission.
Get Your Credit Report
The first step toward improving your credit rating is to request a copy of your credit report. According to the free file disclosure rule of the Fair and Accurate Credit Transactions Act (FACT), consumers can request a free credit report from Equifax, Experian, and TransUnion, every year.
Correct Any Mistakes
Your credit report may have inaccurate information. If it does, it can negatively effect your credit rating. It's important to report and correct any mistakes, by sending the appropriate credit reporting company an official letter disputing the report, along with any proof that supports your claim. Negative reports that are true can only be removed by the passage of time -- in some cases, up to 10 years.
Building Credit
Building credit can improve your credit rating, especially if you're young. One way to build credit is to apply for a credit card, and use it regularly to pay bills, or make purchases. If you're careful to always pay off your monthly payments on time for a year or more, you can start to build your credit score up. This in turn makes it more likely you'll be approved for bigger loans and purchases.
Maintaining Good Credit
It's always easier to simply maintain a good credit rating, than it is to build a bad credit score back up. One way to maintain your credit rating is to consistently put $10 - $20 into a savings account for emergencies. Before long, you'll have three to six months' worth of expenses saved for an emergency, to help pay bills on time, and to help save your credit score.
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