subject: Clean Credit Report - The Most Cost Effective Method To Raise Your Credit Score [print this page] There are many benefits for having a clean credit report. A clean report means that you are not only eligible for more credit facilities from different credit card companies, but the terms will be much less stringent and you will pay a lower interest rate on the loans than someone who has a less impressive report. Also, with good credit, your insurance premiums will be lower and you've just improved your chances of getting that job or apartment. But if you already have a bad credit record, there is no need to panic. The process of improving and cleaning the report is fairly straightforward and with a little help from e.g. some credit repair software, it only requires discipline and keeping at it for you to get your clean credit report once again. The following are some of things you can do if you are to end up with a better credit record.
Develop good financial habits
Learning and actively practicing good financial discipline is probably the first thing you need to do if you are to end up with a better credit rating. You should ensure that you promptly pay your bills, loan installments, credit card repayments and any other transactions that have an may impact on your credit record. You can set up standing instructions on your bank account that automatically debits your account and makes payment at a specific time of the month. This way, you'll never forget to make a payment. Analyze your spending to see ways in which you can reduce your monthly expenses. If you don't need it, don't use it or buy it. Never give any bad checks. If you think you could inadvertently fall prey to a bad check, get overdraft protection to ensure that no check you draw is returned due to insufficient funds.
Ensure that good credit is reported
While working towards a clean credit report, one of the things that can quickly improve your credit rating is incorporating information on past loans against which you have a clean repayment record. This can include e.g. that college loan that you have always paid on time or an up to date credit card that you hold that you have used for some time and on which you have never missed a payment. To have this information added to your report, attach the documentary evidence to a cover letter requesting the credit reference bureau to add the information. Do not send the letter to just one bureau but rather target all the major ones. In the US, there are 2 or 3 major credit reference bureaus and it is these ones that you should contact. If you do not have the documentary evidence at hand, you can always request for the same from the lending institution. Note that credit reference bureaus may levy a charge to include this good report especially if you are the one initiating the request for inclusion. But the benefits will in due course outweigh any cost.
Audit your credit records
Do not place unquestioning confidence in the information on your credit history that is currently held by the credit reference bureaus. It is always good to maintain a healthy level of suspicion. Ensure that you review your report regularly (at least annually) to ensure that all the information given is accurate. It is quite common for someone's bad credit history to be loaded against someone else. Mistakes do happen. If you currently have a loan whose payments are up to date and that loan is not reported, chase up the institution which you are paying the loan to ensure that they do report it. Make sure that any erroneously negative report is expunged as soon as possible. Such errors may result from incorrect information forwarded by a certain institution, duplication of data or the inclusion of what are effectively obsolete transactions.
Correct your credit records
Getting items deleted from your credit record can be a delicate business. There are right ways and wrong ways to go about this. Here is where you need to get the professionals to help you. One of the best solutions is to invest in some credit repair software. This gives you up to date information on how to approach the credit companies, it also guides you through the whole process step by step. It even writes your letters for you (poor wording of your letter will drastically reduce your ability to get what you want done). In fact the software can even run a diary system to make sure you don't lose track of everything - dealing with multiple credit agencies can get a little complicated.
Maintain your clean credit report
Having worked so hard to get a clean credit report, you want to ensure no more errors are logged against it. This is where the annual review is so important, it's your checking mechanism to make sure you're not paying for someone else's mistakes. As long as the annual checks are ok, you can rest easy that your credit is in tip top condition and you're getting the best deals on loans, insurances, etc.
