Let us face it friend. Many of us cannot afford to pay for large ticket items with cash. The sad truth is that many of us cannot afford to purchase small tickets items with cash either.
Most of us know that most creditors use credit-reporting agencies for obtaining information on a person when they have applied for any type of financing. The three major agencies are Equifax, Experian and Trans Union. These agencies or repositories simply accept your information as it comes in electronically. They DO NOT check the accuracy of information coming to them.
Friend, when you apply for a loan, a credit report is requested from one or more repositories. Along with this information, the local credit reporting company delivers a numerical credit score for you. This credit score represents a composite of your credit history, employment, ability to save etc. This score can change daily favorably or unfavorably depending on any information the repositories receive. The higher your credit score, the better your credit rating, the more favorably you are looked upon and potentially the lower the interest rate you are charged.
Most of us do not have impeccable credit. Even if you pay all your bills on time you probably do not have perfect credit. When we are looking to finance something we, of course, want to get the best interest rate possible.
Credit Bureaus are nothing more than record keepers and have no legal power over you. Since the bureaus have made so many errors in the past, all Federal Laws regarding credit information are very much in our favor.
The best kept secret for increasing your credit score is to have someone with a great credit score add you to one of their credit card accounts. Within weeks you will see an improvement in your credit score due to the association.
There are eleven steps to repairing and improving your credit score:
1) Obtain your three credit reports;
2) Review the reports and locate the negative items;
3) Dispute negative items with the bureaus;
4) Disputed items are removed or corrected; Items that were not re-verified are removed;
5) Negotiate with creditors and collection companies;
6) After negotiating and making payment, creditors delete the negative accounts or change then to a positive rating;
7) State the item you are disputing, but do not use dispute forms or file numbers provided by the bureau. This will cause fewer delays by the credit bureau asking for clarification;
8) Do not confirm the account if any information about the item is wrong;
9) Do not use letterhead (you do not want to raise any Red Flags);
10) Do not photocopy a fill in the blanks form letter (another Red Flag);
11) Send disputes during busy times of the year. For Example, Christmas rush for the creditor and the bureau can be a time that catches them before they can thoroughly investigate within a reasonable time.
Remember the federal credit laws are in our favor. We have the advantage. When we dispute an item a Bureau must verify the accuracy of information, that a creditor reported, within 30 days, otherwise it MUST be removed.