Improving Your Credit, For Free
If your credit is less than perfect, Life House Financial is here to help. To be clear, there is no magic fix to improving your credit. However, there are steps which can be taken to remove negative inaccuracies off your credit report. There are also steps you can take to build-up your credit, which may improve how you look to lenders overtime.
Building-up Your Credit History
The first step in building your credit history is to know exactly where you stand. The average credit score in the United States is around the mid-to-high 600s. If you are below this number, you may have some work to do. If you’re above a 660 credit score, you’re may be wasting your time reading about ways to improve your credit history.
Check Your Credit Report For Inaccuracies
Once you have an updated copy of your credit report, the first thing you'll need to do is check for inaccuracies and negative reporting items. When examining your report, make sure you check every section carefully. Even a misspelling of your name, or a wrong address can affect you.
Common things to look for include:
Accuracy of your name, previous addresses and employment history
Late payments and charged-off accounts
Collection accounts, judgements and tax liens
Number of hard and/or soft inquiries
The status of accounts. (i.e.. are your closed accounts noted as being closed)
If you find anything that needs to be corrected, your next step is to dispute those items with both the creditor and the credit reporting agency. Below we've included a step-by-step guide on how to complete this process.
Disputing Items On Your Credit Report
Once you've identified the problem areas of your credit report, disputing those items is your next step. A quick way to dispute items on your credit report, is to file a dispute online through each credit reporting agency's website.
TransUnion = www.transunion.com/personal-credit/credit-disputes
Equifax = www.ai.equifax.com/CreditInvestigation
Experian = www.experian.com/disputes
If you are not computer savvy, you may also mail a written dispute letter to the three major credit agencies TransUnion, Equifax and Experian using the following addresses.
If you need guidance on how to write a formal dispute letter, we've provided a download link including a few free templates. These templates are meant only as a guide, and should be altered to match your specific situation.
Free Credit Report Dispute Letters | Click Here to Download
Once you've completed your dispute letter(s), you'll need to send each letter with a copy of your credit report to each credit agency. This means if you are going to dispute 1 item, you'll need to print 3 letters and 3 credit reports, that's 1 letter and 1 credit report for each of the 3 credit agencies. It is best to highlight which item on your credit report that needs to be corrected. When sending your letters, be sure to mail them via certified mail so can keep track of when the credit agencies received your letter.
After Submitting Your Dispute
After you have formally disputed an item on your credit report, the credit agency will contact the creditor. The creditor then has up to 30-days to respond back to the credit reporting agency. If the creditor fails to reply within the 30-day window, the credit reporting agency is required by law to remove the item off your credit report. If the creditor confirms the disputed account is an error, and therefore needs to be fixed, the credit agency will comply. If the creditor confirms that the account is indeed being reported accurately, the credit reporting agency will notify you, and nothing will be changed on your credit report.
Professional Credit Repair Companies
If you are confused about or intimidated by the process of doing things on your own, you may want to consider hiring a professional credit repair company. In some situations, it makes sense to retain a professional to help you. Professional credit repair companies know their way around, and also how to effectively communicate with each credit bureau.
Adding Positive Reporting Items to Your Credit History
When trying to improve your credit standing, it's important you make all payments on time. Your pay history is a major part of how your credit score is determined. Missing even a single payment can drastically lower your credit score. In addition to paying your bills on time, you may want to build-up the amount of positive accounts reporting to your credit.
Reducing Your Credit Utilization
Another big part of your credit score is something called your credit utilization. This is the amount of credit available to you, versus the amount of credit you are actually using. Ideally, you want to be below 30% credit utilization.
Using a personal loan to consolidate your credit cards and other unsecured debt can help improve your credit utilization. When you pay off your credit cards with a consolidation loan, you won't eliminate your debt, but you may make it look more attractive.
Generally speaking, closing your credit cards is a bad decision when it comes to your credit score. To reach the highest score possible, you'll want to have a few accounts reporting to your credit history for several years. If you close your accounts, they will no longer report to your credit. This will shorten what is called the length of credit history.
Life House Financial Promise
Life House Financial is dedicated to helping you in any way we can. If you have questions, we are here to help. Life House Financial does not offer credit repair services, therefore you don't have to worry about being pressured or sold into any type of service. Instead, we'd be more than happy to answer any questions you may have about the process of improving your credit. If we can't answer your question, we can connect you with a credit repair professional that may be able to help.
Our representatives are standing by Monday - Friday 9:00 am to 5:00 pm Eastern Standard Time at 1-888-952-7280.