Date published: Tuesday, September 22, 2009
The Federal Reserve Board
As lenders tighten their credit standards and firms continue to push their credit score tracking services, it is now more important than ever to focus on your credit score rating. Defects in your score can cause a great amount of pain in getting a loan, making a purchase or even seeking a new position. The Federal Reserve Board suggests five ways to improve your score.
1. Get copies of your credit report
Go to www.annualcreditreport.com and obtain your report. Under federal law, you can secure a free report from each of the credit reporting companies once every 12 months. You may also call 877-322-8228 to order. After you get the report, make sure the information is correct!
2. Pay your bills on time
One of the most important things you can do to improve your credit score is to pay your bills by the due date. You can set up automatic payments from your bank to help pay on time, but be sure you have enough money in your account to avoid overdraft fees.
3. Understand how your score is determined
Your credit score is usually based on the answers to these questions:
4. Learn the legal steps to improve your credit report
The Federal Trade Commission (FTC) has published a guide on how to improve your credit report at: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.shtm. It outlines ways to correct errors in your report, including how to write a “dispute letter.”
5. Beware of credit-repair scams
The FTC says that companies target consumers who have poor credit histories with promises to clean up their credit report. The truth is these companies cannot deliver an improved credit report using the tactics they promote.
Doing it yourself is the best way to repair your credit.
For help on learning more about credit scams, see the FTC fact sheet at: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm.