Managing Your Credit Report

By managing your credit report, we mean to make sure your credit report is accurate and to make sure your credit score is where it should be.

Credit scores are a fact of life these days if you plan to use credit.  Lenders use them. Landlords use them.  Even insurance companies may use them.

Credit scores are normally computed based on information in your credit report. The best you can do for a good score then is to make sure your credit report is accurate and free of derogatory or bad credit.  Normally to achieve a good credit score, you must:

• You must have at least a couple credit accounts to even be able to generate a credit score.  So you must have a credit or store charge account.  It is not necessary to have more than a couple accounts to generate a score. You could also have an installment loan like an auto loan or a home loan or a student loan.
• Pay your bills on time with no late payments.  A late pay is not the end of the world for a credit score, but a pattern of late payments will keep you from having a good score.  Also if your only credit is a late payment, that’s not good.  On the other hand if you have lots of good credit, one late payment is not so bad.
• Do not allow your accounts to be charged off or to go to collection.  If they are in collection, pay them down to zero. Lenders, especially home lenders do not like unpaid collections.
  
• Put bad credit behind you.  It stays on your credit report for 7 years, but when it comes to your score older bad credit is generally less significant than recent bad credit.
  
• Even a credit report with no late payments or collections can have a lower score if the credit report otherwise indicates risk.  For example high credit balances relative to your credit limits may indicate a higher risk.  If possible keep your credit balances below 50% of your credit limit if not lower.
• Make sure your credit report is accurate.  If there is inaccurate bad credit on your credit report, it will adversely affect your score.  Dispute incorrect information in your credit report as explained below.

Managing your credit report also means making sure it is accurate.  If there is inaccurate information in your credit report, you should dispute it.  You should dispute it not only with the creditor who is reporting the inaccurate information to the credit bureaus, but you should also dispute it with the credit bureaus whose credit report displays the inaccurate information.

A sample dispute letter is available from the Federal Trade Commission at:
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.htm

If you have any questions, you are welcome to call our customer service at 888-762-4001 weekdays 8:30am to 5pm weekdays.  We will try to answer your questions.