Improving Your Credit Score

You might ask why it's important to take charge of your credit. Well, the truth is, you can live a much easier life with good credit scores. Want a new car? If you have a good credit score you will likely pay less interest than a person with a poor score. Are you planning on buying a house? Again, you may have a much lower mortgage payment if you have a great credit score.

Get Some Advice

Friends, relatives and agencies or organizations may want to offer advice about improving your credit score. Before you act, consider where the advice is coming from. Some of it could be self-serving.

Here’s one resource that aims to educate consumers on the intricacies of credit scores and credit reporting: CreditFairy.org. Created through a partnership between The Ad Council, The Consumer Bankers Foundation and the Leadership Conference on Civil Rights Education Fund, as well as several banks (including SunTrust), the campaign gives simple steps you can take to improve your credit. There is also a Spanish-language version of the website: ControlaTuCredito.com.

Try the Federal Trade Commission

The Federal Trade Commission offers detailed (and reliable) information that explains the laws surrounding credit practices and how you can improve your credit rating. And best of all, it is easy to understand.

Get a Copy of your Credit Report

The first suggestion the FTC makes is to request a copy of your credit report. As they point out, under federal law, everyone is entitled to a free copy of his credit report once per year. They suggest you write to all three credit bureaus, Equifax, Experian and TransUnion, and request a copy.

Check for Errors

When the reports arrive, the FTC says you should go through them line by line looking for errors. If you find any errors, the agency suggests that you write to the bureaus. Include your name, address, Social Security number and detail the errors you find. Also include copies of documents that support your claim. You might want to also include a copy of your credit report with the items that you are questioning circled. The FTC also emphasizes that it is best to send the request by certified mail, return receipt requested, to prove that it was received. The bureaus have up to 30 days to investigate your claim and they are required to inform you of their findings in writing. If your claim is accurate they will also be required to make changes to your report. Even if changes are made to your credit report, it may take time before you see the results. But in the end, taking these steps can result in a lifestyle that includes good debt management and lower interest rates on large purchases and credit offers.