Improve your Credit Score

Free credit report

Your credit score is constantly changing as your credit report information is always changing.

Unless you have incorrect information on your report, taking steps to improve your credit report may not significantly or immediately impact your credit score since the scoring models study patterns of credit behavior over time.

Keep in mind that as negative information ages, it has less importance.  It usually takes one full year of good credit behavior to see a significant change in your credit score.  This means you should exhibit a full year of responsible payment behavior in your credit report -- specifically, conservative use of credit, paying on time, and not requesting too much credit during a short period of time.

With sites like FreeScore credit score services, it's never been easier to check your ratings and see how your score is improving. Here are some tips to improve your credit history, which, if you follow these tips over time, will improve your credit score.

1. Review Your Credit Report

Reviewing your credit report puts you in control.   To order a copy of your credit report, contact your Choice Finance® Loan Officer, who can give you a free copy of your credit report and make it easy for you to stay on top of the information in it.

You have to know what's there before you can make it better.  There are three major bureaus who generate FICO scores:  Equifax, Experian, and Trans Union.  It is recommended that you get all three because many mortgage lenders will obtain data from all three of these bureaus in analyzing your credit history.  The cost for all three is typically only $20.00.

By making sure that only your accurate credit history appears on your report, you ensure that the credit score it generates isn't lowered by inaccurate information.

Checking your credit report on a regular basis allows you to stay on top of what credit grantors will read about you when they check your credit history, and enables you to correct any inaccuracies and catch fraud before these problems impact your loan.

2. Correct Errors on Your Credit Report
You have to make sure all information on your credit report is complete and correct.  For example, if you have paid off an account but it is still listed, make sure the report lists a zero balance. In particular look for:

  • Incorrect or incomplete name, address or phone number
  • Incorrect social security number or birth date
  • Incorrect, missing, or outdated employment information
  • Incorrect marital status -- a former spouse listed as your current spouse
  • Bankruptcies older than 10 years or not identified by the specific chapter of the bankruptcy code
  • Lawsuits or judgments older than seven years
  • Paid tax liens older than seven years, delinquent accounts older than seven years or accounts that omit the date of the delinquency
  • Credit application inquiries older than two years
  • Unauthorized credit (not promotional) inquiries--credit-reporting agencies usually do not remove these at a consumer's request, but it never hurts to ask
  • Co-mingled accounts -- credit histories for someone with the same name or similar social security number
  • Duplicate accounts; premarital debts of your current spouse attributed to you.
  • Lawsuits you were not involved in
  • Incorrect account histories -- such as a late payment notation when you paid on time or a debt shown as past due when it was discharged in bankruptcy
  • Paid tax, judgment, mechanic's or other liens listed as unpaid
  • A missing notation when you disputed a charge on a credit bill
  • Closed accounts incorrectly listed as open
  • Accounts you closed that that don't indicate, "closed by consumer"
  • Incorrect aliases
A few other things to remember:
  • Accounts that have been paid off can still be listed on your report, although they should indicate that you've paid them off.
  • If you've been through bankruptcy, both the public record information about the fact that you've been through bankruptcy can be listed and the individual accounts that were discharged may also have a notation that they were discharged may also have a notation that they were included in your bankruptcy.
  • Information about accounts you share, or previously shared, with a spouse will be listed in both your reports.
  • Many people incorrectly assume that if they have paid off a past-due debt, the old negative information will be removed.  It will remain on the credit report for up to seven years.  It will also not increase your scores right away...  this takes months of you making timely payments.  Your scores will be strong once you have a history of payments made on time.

Once you've compiled your list, complete the request for reinvestigation form that came with your credit report or type a letter describing every problem.   Send your letter to the address provided by the credit-reporting agency for disputing information.  Enclose copies of any documents you have that support your claim.  Keep in mind that any corrections you make to your report require 30 days to take effect.  Correcting actual errors on your report will enable you to increase your scores immediately.  Talk to a Choice Finance® Loan Officer about doing a "credit re-score".


Improve your credit scores, cont...
Protect yourself from identity theft