subject: How You Can Fix Your Credit Score [print this page] There are some key steps to giving your credit score a bump. The two most influential pieces of information when your score is calculated is your payment history and your ratio of credit to debt. These two aspects are about 70% of your whole score.
Where Do I Start?
First things first, just by paying your current bills on time you will start to create a trail of positive payment history. This is important because not only do you have to have show you will pay on time but you also will need to remove the negative items from your past.
Your ratio of available credit to debt will look at all your debts. Obviously the more debt you have the worse it will be, however it doesn't always have hurt you. In fact what you need to concentrate on here is having available credit.
Available credit is lines of money that you are not using. For example, with a credit card if your limit is $1,000 and your balance is $300 then your available credit is $700. This is what is most important here. The theory is that if you have open funds that you aren't using, then you are in a secure financial position.
The same is true vice a versa. If you are borrowing every dollar and have your credit card maxed out, then you will appear to be in an insecure financial position. This is easiest shown with an unsecured major Visa or MasterCard by having available not used funds.
It is important to remove the negative items from your report also. This is legal; in fact Congress passed a law giving you the right to dispute any item you feel to be questionable on your report. The law was passed in 1970 and is the Fair Credit Reporting Act.
This law says that the bureaus must investigate an item you challenge on your report and if the item is not verified then it must be deleted. It also says that a negative item can remain for a maximum of seven years. In the recent past they have amended this piece of legislation to give you a copy of your report with each bureau for free every year.
It is with good reason that Congress passed this law. According to the experts 25% of all reports have an error on them. Think about it, it is as easy as dialing a wrong number. Further businesses make mistakes all the time. It is essential to ensure that your report is accurate and one of these mistakes is not damaging your score.
While the law is on your side you are going against a goliath in the bureaus. The bureaus annually report revenues in the billions of dollars! As they are a business they want to protect their profits and when the bureaus investigate and correct reports they are spending money that otherwise would be profit.
Don't they have to investigate? Yes, they do however they have influenced the law makers in our country over the last 40 years. Today before the bureaus will investigate they must deem your dispute valid.
Often this just means they will respond with erroneous letter requesting more information when you send in your dispute. This is why you hear how hard it is to fix your credit. If you stay persistent you can get them to investigate and frequently investigations result in the deletion of items.
