Keeping your credit record clean takes some care and due diligence. Applying for the right credit and ensuring that you make your repayments in full and on time is the best way to avoid damage to your credit history. Even the smallest error can result in a negative score against your name that could follow you for an extended period of time. Monitor your credit history regularly. If you find any discrepancies,rectify them immediately.
However,if you find your credit rating is too low you may need to improve your credit history by reading the complete guide to credit repair.
1. Get A Credit Report
You can obtain a free credit report from any of the major credit bureaus like Experian,TransUnion and Equifax. If you require an additional report,you will need to pay a small fee. by federally approved credit repair companies who will provide you with a full credit record as part of their paid for service. Once you have your credit record,you can determine exactly who you have credit with,where there are outstanding balances and whether you have any court judgements against your name.
2. Analyzing Your Credit Score
Different credit agencies use different scoring points. A good credit record requires the following scores with the 3 major agencies:
Experian – 880 out of 999
TransUnion – 4 out of 5
Equifax – 420 out of 700
If your score falls below these minimums,then you need to take immediate action to start repairing your credit record.
3. Check For Discrepancies
The smallest discrepancy with any of your creditors such as incorrect contact details or address can negatively affect your score. So check each and every fact and make corrections where necessary. Also check for errors where you may have repaid an account or loan in full but this does not reflect with the credit agency. Call the creditor in question and get them to rectify the error. Alternatively,contact the relevant credit agency regarding the error and ensure that it is rectified. Also check for any fraudulent activity. Someone may have applied for credit in your name that you are unaware of. Report fraudulent activity to the relevant credit agency immediately and to the police.
4. Repay Outstanding Balances
If you have any outstanding balances,these can have a very negative impact on your credit score. Repay these as quickly as possible and bring your accounts up to date. Start with the smallest amount and work your way up until all your outstanding debt has been repaid. If you can’t afford this,find out more about how debt consolidation can help you.
5. Debt Counselling
If you simply cannot afford your monthly repayments or cannot find a way to improve your credit score,contact a debt counselling agency for free advice. They can assist you in various ways such consolidating your debt or negotiating with your creditors for more affordable monthly repayments. If you do opt to go into debt review,this will help repair your record quickly but will also prevent you from applying for more credit or loans.
Keep in mind that a bad credit score can affect you in many ways. It can prevent you from getting that dream job or signing a rental agreement. It can also make it much more difficult to get credit or apply for finance in the future.