There is no way to increase your score quickly, and the best way is to establish responsible credit practices over time.
Steps to Repairing Your Credit
- Pay bills on time.
- Do not apply for credit frequently. Although a few inquiries do not hurt your score significantly, many inquiries do.
- Reduce balances on your credit cards. Being maxed out or having a majority of the credit used will worsen your credit.
- Obtain more credit if you have very little. If you do not have sufficient credit, this can negatively impact your score. Often it takes seven years for most negative information to be removed from your credit report, so follow these guidelines and be patient. Bankruptcy information remains on the report for ten years. Also, keep in mind that the most recent information is factored more heavily than old information.
Some of the factors that affect a credit score are
- Length of time at permanent residence
- Employment history
- Length of time credit has been established
- Amount of credit used out of available credit
- Late payments
- Bankruptcies, charge-offs, collections and other negative information
Credit mistakes
Often times, credit reports can accumulate errors and some of these errors may be serious enough to lead to a denial of credit. For this reason it is important to fix any incorrect information as soon as you discover it.
How to report mistakes:
You have a right to report inaccuracies to both the credit bureau and the provider of information to the credit bureau. For example, if you have a mistake from ABC Credit Card on Experian's credit report, you should report it to both ABC and Experian. They both have responsibilities to correct inaccurate or incomplete information. In both cases, include copies of documents which support your position, and send your letter by certified mail return receipt requested, so you have proof that they received it. It is your right under the Fair Credit Reporting Act (FCRA) to have inaccuracies corrected. To see an excerpt of this act, scroll below.
First, contact the mistaken credit bureau below:
Equifax Information ServicesP.O. Box 740241Atlanta, GA 30374-0241800-685-1111
Experian's National Consumer Assistance CenterP.O. Box 2002Allen, TX 75013888-397-3742
Trans Union CorporationP.O. Box 2000Chester, PA 19022800-961-8800
The letter should include your full name, current mailing address and previous addresses for the last five years, your Social Security number, your date of birth, your spouse's name and Social Security number (if applicable), the name and account number of the creditor and item you're disputing, and your explanation of the error. The credit bureau must then reinvestigate the items in question -- usually within 30 days -- unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the credit bureau, it must reinvestigate the matter, review all relevant information provided by the credit bureau, and report the results to the credit bureau. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide credit bureaus so that they can correct this information in your file.
When the reinvestigation is complete, the credit bureau must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the credit bureau cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the credit bureau gives you a written notice that includes the name, address, and phone number of the provider.
Second, tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any credit bureau, it must include a notice of your dispute. In addition, if you are correct -- that is, if the information is inaccurate -- the information provider may not use it again.
If the credit bureau or information provider won't correct the information you dispute, ask the credit bureau to include your statement of the dispute in your file and in future reports. If you request, the credit bureau also will provide your statement to anyone who received a copy of the old report in the recent past. There usually is a fee for this service. If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a credit bureau.
The Federal Trade Commission does investigations of complaints to detect patterns, but they cannot act as your lawyer in disputes. Send your questions or complaints to: Consumer Response Center, Federal Trade Commission, CRC-240, 600 Pennsylvania Ave NW, Washington, D.C. 20580. If need be, you can sue the credit bureau or information provider in state or federal court for most violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.