Get Your Credit Score Back On Track

January 19 2017

One number. It affects so much of our financial lives from where we live to the types of jobs we’ll qualify for.  So what is this number? It’s your credit score.  And while it plays such a significant role in the largest financial decisions in our lives, many people don’t regularly review their credit report and take action to make sure it is as accurate as possible.

More than 90% of lenders use the FICO scoring system when making lending decisions.  The FICO scoring model has a range of 301-850.  The higher the score, the better you are viewed in the eyes of lenders.  A credit score below 650 is typically considered to be a poor rating.

Here’s a guide to cracking the credit code so that you can take steps to put yourself in the best position when dealing with lenders.

Get Your Credit Report and Make Sure It’s Correct

Knowing what’s on your credit report is the first step in fixing the issues.  Federal law allows you to get a free credit report from each one of the major credit agencies every 12 months.  The companies include:

  • Equifax
  • Experian
  • TransUnion

It is important to take a look at all three credit reports as they can differ in what they are reporting about you.

Checking your credit report does not count against you regarding your credit score.

Also, if you have recently been denied credit, you are allowed to obtain a free or discounted copy of your credit report.  According to the Fair Credit Reporting Act, the financial institution must provide you with an adverse action letter explaining why you were not approved.  The letter will include contact information for the credit reporting agency used in making the decision along with instructions on how to receive a copy of your report.

If you find errors on your credit report, take action to dispute them.  You can submit your dispute online with all three of the major credit reporting bureaus.

Automate the Process

With our busy lives, it is sometimes hard to remember which payment is due when.  Setting up payment reminders or automatic payments are ways to help avoid late payments and negative effects on your credit report.

Contact Your Creditors

If you are temporarily having trouble meeting your financial obligations, reach out to your creditors.  Most lenders are willing to work with you to create alternative payment plans to meeting your financial obligations which in turn, helps to protect your credit rating.

Improving your credit score is not something that will happen overnight.  Through a lot of hard work and persistence you can be back on track, moving forward to meet your financial goals.

If you have any questions about these tips or would like to receive more information regarding the best loan option for you, please feel free to contact us.