Five Steps to Cleaning Up Your Credit

June 15, 2015 9:31 pm  |  Comments: 3  | Views: 5017

Your credit report is one of the most important aspects of your financial portfolio. While many may cringe at the thought of looking up their credit score due to past mistakes, it’s important you keep tabs on your credit report as it is a complete representation of your financial history. Not only does your credit report affect interest rates on potential loans but it can also determine whether or not you can be approved for an apartment or mortgage. Thankfully, if you have a low score–not all is lost. There are many ways you can clean up your credit report and be back in the “Excellent” ranking and we have a few steps that will make the road much easier. .

  1. Review Your Credit Report: The first step is a no-brainer but it’s important for you to actually check your report first to see the state of your financial affairs. The law entitles you to one free credit report every 12 months from the top three (Experian, Equifax and TransUnion) so you can make sure to get an accurate idea of where your credit stands.
  2. Double Check Listed Information: Many times people only focus on the credit score and don’t check to see if their personal information is accurate. You want to make sure that your name, address and social security number are all accurately reflected. It’s also important that you ensure any collections accounts are actually yours, the last thing you need is to take responsibility for a bad debt that’s not even yours.
  3. Review Any Errors: Another important issue is to make sure there are no errors on your credit report. From higher balances to collections that haven’t been updated, you want to make sure all the information is correct. Many times collection agencies won’t report proper amounts or paid off balances which can end up hurting your overall score.
  4. Phantom Money is Not Good:  The definition for phantom money can best be described as when your bad debt is sold to a collection agency but the original creditor doesn’t zero out your balance. Unfortunately, when this happens it shows as if two separate amounts are now owed. If your debt is sold off multiple times then you end up with a bunch of phantom debt.
  5. Dispute Errors: The fastest way to dispute an error is to file a claim with the credit bureau. Usually they have an easy to use dispute form that can you can submit. However, it’s important to always follow up every 7-10 days.





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