Personal Finance Care

Credit scores are calculated on the basis of information available on your credit report. The credit scores will keep changing over the period of time depending on how the status of your accounts with the credit grantors. Here are some ways to improve your credit scores.

Review your credit report regularly and see if there are any incorrect items reported on your credit copy that’s hurting your scores. Credit bureaus handle millions and millions of consumers’ reports. The errors are expected. Your best bet is to get rid of the incorrect information from your credit copy and your scores will rise dramatically.

Don’t close any credit card account if it is old and unused. Creditors review all information and they cannot draw too much conclusion from the accounts that are recently opened. There are many people who move debts from several credit cards to one card and then close the old accounts. Since creditors look at the debt-to-credit limit ratio this can have a bad affect on your credit score because you have the same amount of debt but less available credit.

Creditors review the average age of your credit accounts. So keeping the old accounts open definitely helps.

Reduce your credit card balance to 75% of your available credit.

Always pay your bills on time. Your creditors will report negatively on your credit copy if you are late in your payments.

Don’t let any creditor report an inquiry on your credit copy without authorized reasons. Anyone viewing your credit copy sees too many inquiries from different lenders, they will understand that you have been denied of credit too many times.

Don’t open too many credit card accounts just to increase your available credit.

Every US citizen must review their credit report periodically to check if all the accounts are reported correctly by their information providers and there is no possible identity theft. If you are suspecting an identity theft when it is still in the early stages, you will be able to take necessary actions after reviewing each account on your credit file. Every US consumer is guaranteed at least one free credit report in a year from each credit reporting agency. Many people do not have a fair idea of how to order their free credit copy and where to look for it. Below you will find necessary information of how to order your credit report via internet, phone and by US mail.

• How to Order Your Free Credit Report via the Internet?

Internet is the easiest and the most convenient way of ordering your credit report. You will be able to view your credit report online on the three national credit reporting agencies within several minutes, as opposed to several days if you order your copies by US mail. If you find any incorrect item on your credit copy, you will be able to dispute it instantly. The credit reporting agency will verify the item with your information providers and if your dispute is found to be correct, the item will be removed from your credit report. You can start this process by going to the website www.annualcreditreport.com affiliated with the Federal Trade Commission. You will be able to pull a free copy of your credit report from each credit reporting agency when you order it from the Annual Credit Report website. In order to pass the security check, you will have to answer a few questions that must be known to you only. This is to prevent any fraudulent activity if someone else is trying to pull your credit report.

• How to Order Your Free Credit Report by Phone?

If you want to order a copy of your credit report by phone, you may call the toll free number 1-877-322-8228 and request for a credit copy. Once you have called this number and ordered for a copy, your free credit report will be delivered to your mailing address by US mail within 2 weeks.

• How to Order Your Free Credit Report by U.S. Mail?

You also have the option to order your credit report by US mail. This is the slowest option because it takes several days for the credit bureaus to first receive your request and then send it by US mail. You can make your request for a free credit report on the website www.annualcreditreport.com and mailing it to

Annual Credit Report

Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

When you are viewing your credit report on the annual credit report website, make sure that you take a print out of the free copy and save a copy in your computer. Once you have closed the credit report on a certain credit reporting agency website, you will not be able to access it again for a full year, unless you pay a fee. You should make sure that you have a copy of your credit report from the credit reporting agency before moving on to the next one. Thoroughly checking your free credit reports for errors and unauthorized inquiries is the best way to make sure your identity has remained safe and that your accounts are reporting as they should be, and your credit scores are calculated accurately.

Just because you have a poor credit, it doesn’t mean that you won’t get any new credit from a potential lender. Creditors have their own standards of granting credit and each of them will look from their own perspective. Some of the lenders will review your recent credit history like how you have been paying your bills recently, without going back to the past.

Stick to a strict budget with your finance. You have to save some money from your income so that you can contribute towards paying off your creditors. If you are not able to save much, make a repayment plan with your creditors and make sure that you don’t default in the plan. If you are not able to do this also, consult a debt counseling company that can help you in working out some kind of payment arrangements with your creditors. They will charge you a fee for the services that they are going to provide and negotiate with your creditors. There are some non–profit organizations who will work with you to solve your financial problems. Always make sure that you have researched the company thoroughly before putting your money. There are some reputable credit counseling organizations that will advise you with good budgeting tips and offer free educational programs. Their main objective is to walk you to a debt free life.