Discover How You Can Raise Your Credit Rating
There are three major credit bureaus (Equifax, TransUnion, and Experian) that maintain records about you that reflect your financial history. Think about that for a moment they are maintaining records on millions of people, where each person has and has had multiple credit experiences in the past. All of this adds up to billions of records that they need to keep straight. And it gets worse some lenders report only to one credit bureau, some report to two of them, and some (like your mortgage company for example) report to all three of them.
This gets even more complicated. Over the years, one lender may change from reporting to one credit bureau and start reporting to a different one. This is also a business, so they go where the best deals are. But the impact on you is that it is a fact that your credit report contains errors, and those errors will not get fixed if you do not take action to get them fixed, since the attitude of the credit bureaus is that if you do not care about those errors, neither do they.
All of this data adds up to create a credit score or credit rating for you, which is a number that reflects your ability or willingness to repay a loan, whether that is a mortgage, a car loan, a department store credit card, your Visa card, etc. So how does that affect you? Because the higher and better your credit score, the more favorable of a risk you are to the lender.
Just as one example, I personally know some people who were paying an 8.175% interest rate on their mortgage. This couple took steps to improve their credit score, and when they had finished and re-applied to their mortgage company, they were approved for a new interest rate of 5.85%. Over the course of their mortgage loan, this alone will save them several thousand dollars.
Many people want the easy way out, so they pay fees for a credit repair service. This is not necessary and you are throwing money out the window. A credit repair service will not do anything that you cannot do yourself, but you need to be motivated to follow up on the various requests that you will be sending in. You see, you can dispute negative information that appears on your credit report, even if it is accurate. If it is not accurate, your job is easier because the credit bureau must remove the negative information if it cannot be proved. But even for negative information that is accurate, perhaps a loan from your past, the original lender may not be in a position to verify that data, and if it cannot be proven after you have disputed it, it needs to be removed from your credit report.
You need to get a copy of your credit report from all three of the major credit bureaus. Since they are separate companies, the data they maintain on you is almost certainly different too. Then go over your credit report and look for anything that appears to be a negative comment. Look at it from the aspect of a lender who is looking to approve or deny a loan request or a new line of credit. When you find something (and you will), then your job starts as a campaign to start improving your credit score.
Jon is a computer engineer who maintains web sites on a variety of topics based on his knowledge and experience. You can read more about Improving Your Credit Score at his web site Raise Your Credit Score For A Better Credit Rating.
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