CREDIT REPAIR TIPS FROM THE
FEDS
The Federal
Reserve Board
1. Get copies of your credit report —then make sure the
information is correct.
Go
to www.annualcreditreport.com .
This is the only authorized online source for a free credit
report.
Under federal law, you can get a free report from
each of the three national credit reporting companies every12
months.
You can also call 877-322-8228 or complete the
Annual Credit Report Request Form at
www.ftc.gov/bcp/conline/include/requestformfinal.pdf
and mail it to
Annual Credit Report Request Service, P.O. Box
105281, Atlanta, GA 30348-5281.
2. Pay your bills on time.
One of the
most important things you can do to improve your credit score is
pay your bills by the due
date. You can set up automatic payments from your
bank account to help you pay on time, but be sure you
have enough money in your account to avoid
overdraft fees.
3. Understand how your credit score is
determined.
Your credit
score is usually based on the answers to these
questions:
Do you pay your bills on time?
The answer tothis
question is very important. If you have paid
bills late, have had an account referred to a
collection agency, or have ever declared bankruptcy, this
history will show up in your credit report.
What is your outstanding debt?
Many scoring models
compare the amount of debt you have and
your credit limits. If the amount you owe is close
to your credit limit, it is likely to have a negative
effect on your score.
How long is your credit history?
A short credit history
may have a negative effect on your score,
but a short history can be offset by other factors,
such as timely payments and low balances.
Have you applied for new credit recently?
If you have applied for
too many new accounts recently,
that may negatively affect your score. However, if
you request a copy of your own credit report, or
creditors are monitoring your account or looking at
credit reports to make prescreened credit offers,
these inquiries about your credit history are not
counted as applications for credit.
5 Tips for Improving
Your Credit Score
How many and what types of credit accounts do you
have?
Many
credit-scoring models consider the number and type of credit
accounts you have.
A mix of installment loans and credit cards may
improve your score. However, too many finance
company accounts or credit cards might hurt your
score.To learn more, see the Federal Trade Commission’s
publication on credit scoring at www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm.
4. Learn the legal steps you must take to improve your
credit report.
The Federal
Trade Commission’s “Building a Better Credit Report”
(www.ftc.gov/bcp/edu/pubs/
consumer/credit/cre03.shtm) has information on
correcting errors in your report, tips on dealing with debt
and avoiding scams—and more.
5. Beware of credit-repair scams.
Sometimes
doing it yourself is the best way to repair your credit. The
Federal Trade Commission’s
“Credit Repair: Self-Help May Be Best” (www.ftc.gov/bcp/conline/pubs/credit/repair.shtm)
explains
how you can improve your creditworthiness and lists
legitimate resources for low-cost or no-cost help.
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