In the last couple of years with the general economy in a decline, many people have had credit difficulties; even some people who have always had excellent credit are having some problems now. Credit scores can be confusing and many people do not understand just how credit scores are determined or what they can do to boost their scores and improve their credit.
There are a number of criteria that determine credit scores. It is not just how timely you are in making your payments, even though that is very important. It also has to do with how much credit you have available to you and how much you have utilized, the type of credit that you have and even how often you apply for credit. If you have credit cards or credit lines that are at their limit, your credit score is noticeably less than it is if your credit limit is high and your unpaid balance is low.
You can actually make a huge difference in your credit score by either paying down your balances to below 20% of the amount available or by getting your credit limit increased so that the unpaid balance is less than 20%. Having credit accessible but not using it is one of the most important components of a good credit score.
Another point is that the longer-term credit that you have is given more importance than the short-term credit. Therefore, if you are trying to improve your credit a brand-new credit card is of no use but a credit card that you have had for a few years is very valuable. If you are trying to rebuild credit after a insolvency or other big financial problem, a new credit card is beneficial but not if you are just working to improve.
You can dispute any erroneous or inaccurate information that is on your credit report. You may be able to get the credit bureaus to remove it if you give them a formal, written dispute explaining your case. After they receive the dispute they have a precise amount of time to either validate the information or erase it completely. The FCRA or the Fair Credit Reporting Act is a Federal law that permits consumers this privilege. Take advantage of that fact.
It is worth the attempt to dispute the erroneous credit on your report because it has been predicted that up to 40% of all disputes are not validated by the credit bureaus within the time period so your likelihood of getting the negative information deleted from your credit report is very good.
As you are repairing your credit make sure that you keep precise records of everything that you do to improve your credit. Keep a written record and maintain copies of all correspondence that you send off to the credit bureaus and all of the responses that they send back. That way you will know which steps produced which outcomes. Always send off a separate letter for each listing that you wish to dispute rather than putting several listings together in one letter.
It takes time to get good outcomes with credit repair. You may need to be unrelenting and keep trying until you are successful but do not lose hope because you can repair your credit and after you do it will be significantly useful to your economic life.