To manage your credit score properly, you must keep track of information in your credit report. While many advertisements claim to have strategies to repair your credit, you can boost your own credit score at no cost. Follow the rules of credit repair to ensure you gain the maximum benefit from repairing your credit.
Fair Credit Reporting Act
The Fair Credit Reporting Act states that consumers have the right to know what is in their credit reports. Since 2005, consumers have been entitled to one free credit report per year from the three major credit bureaus -- Experian, Equifax and TransUnion. The free annual reports can be obtained through AnnualCreditReport.com. In addition to this free report, you can request a free copy of your credit report if you are denied credit or legal action is taken against you based on information in your credit report or you are unemployed or receiving public assistance. Monitor the information in your credit report regularly to ensure all information presented is correct.
What's in Your Report?
Credit reports contain a listing all of your credit accounts and all credit-related activity. Adverse public records, employment information and personal information are all included in your credit report. Creditors use information in your report to determine whether you are a low-risk or high-risk borrower. Pay close attention to this data as it may alert you to possible identity theft. When cleaning up your credit report, search for items that contain inaccurate information, such as the date you opened your account or the amount of a charged off balance.
Disputes
The purpose of the Fair Credit Reporting Act is to protect you from incorrect information on your credit report. Dispute any items in your credit report that are inaccurate. Human error can result in information in your credit report that causes a drop in your credit score. To maintain the highest possible score, it is important to manage your credit accounts properly and keep your credit information updated. Once you file a dispute with the credit bureau regarding the validity of an item in your credit report, the bureau investigates the claim with the creditor. The bureau has 30 days to verify the legitimacy of the item in dispute, and if it cannot do so -- or if it finds that the data was erroneous -- the information must be removed from your credit report.
Credit Score Impact
Updating your address on your credit report has its benefits, but one of those benefits is not credit repair. To repair your credit, focus on the top three factors influencing your credit score -- payment history, amount owed and length of credit history. These three factors account for 80 percent of your score. When searching for items to dispute, consider credit information from these areas first. Removing negative items in these categories will improve your credit score. Rebuilding your credit score takes time, but using a strategy can help you meet your goals faster and avoid wasting energy trying to take a shortcut in your credit repair.
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