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ClearPoint Credit Score Solutions

Improving Your Credit

Having good credit may seem as easy as paying all your bills on time. But the fact is, it isn't always possible to determine how each item in your credit report impacts your overall creditworthiness. If you want to begin improving your credit, it's important to develop an action plan first and then get help when you need it. ClearPoint Financial Solutions' certified Financial Specialists use the following steps:

1. Order a copy of your credit report
Get a copy of your credit report by contacting one of the credit reporting agencies (CRAs) listed below. The recent Fair and Accurate Credit Transactions Act (FACT Act) requires that each of the nationwide consumer reporting companies provide you with a free copy of your credit report annually, if you request it. Obtaining and understanding your credit report are important first steps toward improving your financial situation.

2. Check for accuracy
What should you look for first? Errors. Many credit reports contain inaccurate information that may negatively affect your creditworthiness. According to a recent study conducted by the Public Interest Research Group, one in four credit reports has errors serious enough to disqualify a consumer from buying a home, opening a bank account or getting a job1.

When a credit report contains inaccuracies, it is often because the report is incomplete or contains someone else's information. These errors typically occur because:
  • Credit applicants use different names on different applications (Robert Jones, Bob Jones, etc.).
  • Clerical errors are made when transferring information from handwritten applications.
  • Social Security numbers are inaccurately listed or misread.
  • Loan or credit card payments are inadvertently applied to the wrong account.
3. Don't worry, you can correct mistakes on your report, but diligence is required
Although each CRA has specific procedures, you'll be required to identify each disputed item, state the facts and indicate why the mistake should be deleted or corrected. Whenever possible, include documentation that substantiates your claim. Use certified mail, and request return receipts. Keep a record of all your conversations and correspondence with a CRA or the lender representatives. And remember, your rights as a consumer are protected and enforced by the Federal Trade Commission (FTC). For more information on the federal bill, visit the FTC website.

4. Pay your outstanding debt
Once mistakes are identified and corrected, paying your bills on time will have a significant impact on your credit rating. Lenders want to see a consistent pattern of good payment behavior to other creditors, and the payment history on your credit report serves as an indicator of how you intend to pay them back.

Also, consider reducing credit card balances. Creditworthiness is often determined by how much money you have borrowed in comparison to the total credit limit being offered to you by other lenders. Generally, it's a good idea to keep your balances below 25 percent of your credit card limit.

5. Get expert help and advice
If you want quick results on improving your credit, it is a good idea to get help from a professional. Seeking the assistance of a credit counselor may be crucial, and it can help you save money and headaches in the long run.

When consulting a credit counselor, be sure the agency is a member of the National Foundation for Credit Counseling (NFCC). This agency ensures that credit counselors are being held to the highest standards in the industry. Also, look for the BBBOnLine Reliability Seal - this is one way to ensure that the business will deliver on its promises both in the real world and the virtual world.

For a copy of your credit report, simply write to or call one of the three major credit bureaus:
  • Equifax, P.O. Box 740241, Atlanta, GA 30374, or call (800) 685-1111
  • Experian, P.O. Box 2002, Allen, TX 75013, or call (888) 397-3742
  • TransUnion, P.O. Box 1000, Chester, PA 19022, or call (800) 916-8800
Review your credit report from each CRA at least once a year, especially before making large purchases such as a home or a car. Correcting mistakes on your credit report can take three months and sometimes more. And the longer an error has been on your credit report, the more effort may be required to make any necessary changes. So the sooner you address the problems, the better. Remember, your creditworthiness is only as good as the information in your credit report.

1. Public Interest Research Group (PIRG), 2004
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