| 5 steps for improving your credit rating |
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| Here's how
to read and understand your credit report.
If the negative information in your report is true,
only time and improved habits can change that. Late payments and charged-off accounts
remain on your report for seven years; bankruptcies for 10. Most creditors, however,
look for a pattern of payment rather than focusing on one-time or rare occurrences;
so consistent on-time bill payments will improve those blemishes. 3.
Double-D strategy -- dispute and document
Remember, a bad report costs
you money. So, it pays to be thorough! You can either complete the dispute form
provided with your credit report or write
a letter. Clearly identify each mistake and state why it's wrong. A recommendation
is to send a photocopy of your credit report with the mistakes circled to the
reporting credit bureau. Include copies of supporting documents. Document,
document, document. Keep copies and records of all the forms, letters and documentation
that you send the credit bureaus, plus dates sent. The credit bureau must investigate
any relevant dispute within 30 days of receiving your letter. Any item that is
not verified as accurate by a creditor is removed. Sometimes
it's necessary to contact your creditors to resolve mistakes. Bankrate's how
to fix your credit report will help you tackle the serious errors. If
the credit bureau makes any changes to your credit file, it will send you the
results and a free, updated copy of your credit report. Once a negative item is
removed from your report, the credit bureau cannot put it back on unless a creditor
verifies its accuracy and completeness -- and sends you written notice. 4.
Solve and dissolve debt
Now's the time
to devise
a spending plan that reduces your debt and sets you up to pay on time, every
time. If you're having difficulty making payments, be proactive.
Call your creditors and negotiate to keep your accounts current and from being
reported as delinquent or "bad debt." You can ask for reduced monthly
payments, or even change due dates to balance out your monthly bills. The
same strategy can be used for fixed-loan payments. Remember, though, that this
is a short-term strategy. You'll pay more interest to extend the repayment schedule,
but it allows you to stay current and save your credit rating. Use the extra money
to pay off debts one at a time, gradually increasing payments to other debts. Deal
with any collection accounts. Unpaid collections are worse than paid collections.
You can negotiate a pay-off settlement that reduces your bill, plus demand that
all derogatory remarks are removed from your credit report or at least reported
as paid in full. Be sure to get verbal agreements in writing before sending off
your payment. | 
