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.

If you haven't seen your credit report in the past year, you may obtain an updated copy of your report once a year for free at AnnualCreditReport.com

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

  • Public records

  • 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.

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.

TransUnion, Equifax, Experian

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.

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.

If you'd like to speak with a professional about your options, call 1-855-255-0008 for a free consultation and/or detailed line-by-line review of your credit report.

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.

For example: If you were to add up the limits available on all your open accounts, and the total limit was $10,000, you'd want to maintain an outstanding balance of no more than $3,000.

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.

For example; Lets say you've maxed out your credit cards, at a grand total of $10,000. Lets then say you decide to take out a consolidation loan to pay off those cards. Once you have paid off your credit cards with the new loan, you would have a $10,000 credit limit on your credit cards, but would also have a zero balance. In this example, you credit utilization would drop by 50%, considering no other debt. This is because after you've consolidated your cards, you would have a total available credit limit of $20,000 (the paid off cards, plus the new loan), but would only be utilizing $10,000 of that available limit (the balance on the new loan).

Keep in mind, this would only be true if you kept your credit card accounts open. If you closed your credit card accounts, you will be right where you started. You'd have $10,000 in available credit (the loan) and $10,000 used (the balance of the loan). In this example, you would have closed out the other $10,000 of available credit. Therefore there would be no change to your credit utilization.

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.

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