Improve Credit Scores

Your credit scores and what it means. Rebuild your credit score.

What you don't know can hurt you. More specifically, your credit score, which is formulated when you borrow money, use a credit card, or, as is the case with most, when an education loan is taken out for college. The score is calculated by taking each individual's income, adding in the debt to income ratio and detracting the number of missing or defaulted payments. Each person's score can range from 300(low/poor) to 900(high/perfect). If you miss one or more payments in a row agencies that service said accounts report these defaults. Negative reporting hurts your credit score and your chances to gain more credit for more important things like an apartment, a home mortgage, a car, and even a job.

The Fair Credit Reporting Act states that everyone is entitled to review their credit reports annually for free and contest inaccuracies. This can be done by going to: annualcreditreport.com , where one can find the links to the three main credit reporting agencies in the country. These agencies, TransUnion, Experian, and Equifax all receive credit reports quarterly and one or all may not have the same information as the others. If you find an inaccurate entry, you need to contact that agency as quickly as possible. Letters with an included copy of the page of the inaccuracy used to be the standard method, but technology has changed this. Inaccuracies should always be investigated as it may be a sign of identity theft. Be sure to use the previously mentioned URL and not any other URL as the rest will eventually require you to pay for additional viewing rights and privileges, which is completely legal but a ripoff when you can access it for free. A lot of laws exist to protect both the consumer and the company extending the credit to said consumer, so familiarize yourself with them.

The easiest ways to keep your credit score in good standing are to pay ALL your bills on time and don't create debt you can't pay back. However, if you should find yourself in the position of fair or poor credit, a situation most banks, potential employers, and apartment leasers want to avoid, you can fix your credit but it takes time. There is no quick fix; your credit score(s) didn't end up in the toilet overnight, and it won't take a single night to fix it. Usually the best approach is consistently paying everything on time and not taking out any new lines of credit. However, if you've hit a really low patch, either by marrying and then divorcing someone who sucked the life out of your finances all you can really do is get a secured line of credit and paying on it consistently until it's paid off. This will help rebuild your credit and provide a fiscal reference to anyone who may doubt your intentions or ability to keep up with your bills and payments on everything else.