How to Improve your Credit Score
If you've been turned down on an application for a loan, mortgage or credit card then it may be because you have a poor credit rating. It's important to take action quickly if this is the case as otherwise you'll be unlikely to obtain further credit or you may have to pay higher interest rates in order to obtain credit.
Fortunately there are a few things you can do which can help to repair your credit score.
1. Your credit history is stored in databases held by four main credit bureaus, Experian, Equifax, TransUnion, and Innovis. They keep records of all your financial activity as well as your personal information. Sometimes you'll find you have done nothing wrong but your report has been tainted by someone else's activities in error. Therefore, you need to write to these agencies to obtain a free copy of your credit report and credit score.
2. When your report arrives check it thoroughly for mistakes, including spelling and address errors and list any you find.
3. Send each agency a short list showing the errors you've discovered and adding any corrections. Request the errors are removed as a matter of urgency. You may need to submit further letters over the next few months listing these errors again or further errors you notice.
4. Late payments also show up. You need to contact the lenders of any affected accounts and ask them to remove any poor remarks they've made. If they refuse, then contact the agencies and ask them to remove them. The lenders, by law, have 30 days in which to challenge your request and if they don't then the agency must remove the remarks.
5. Consumer laws state that any accounts in your report that are more than seven years old must be removed. Request that bad accounts are removed immediately.
6. If you are currently having problems repaying credit card or loan debt, contact your loan provider and ask if you can have your loans restructured. They may even agree to allow you a few payment-free months in order to catch up on your other committments. However, if you don't ask, you won't get!
7. Avoid making further late payments or skipping loan payments altogether if you're worried about your credit score.
8. In future, try to make full payments on any further outstanding balances to help improve your credit score and to avoid potential further problems in the future. It can be a good idea to arrange for your full balance to be paid off by direct debit each month to help keep your account in the black and to avoid your debts spiralling out of control.
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