One of the most important aspects of maintaining good credit is knowing your credit score. You can easily check your credit score once a year or every four month. FICO score reports are also available from many credit card companies. It is also a good idea to check your credit score at least three times a year, if possible.
Credit score can be affected with hard inquiries
Although you may not know it, credit scores can be negatively affected by hard inquiries. When a creditor inquires about your credit report, this is called a hard inquiry. These inquiries often occur due to identity theft or error. Routine monitoring of credit reports can help you spot errors. Send a dispute letter to your credit bureau with evidence of any errors. You can also contact the lender and dispute the inquiry.
A hard inquiry will generally affect your credit score by one point to five points. The exact amount will depend largely on your credit score as well as the length of time since you last inquired. Avoid making too many inquiries unless absolutely necessary.
In determining your credit score, the most important factor is making timely payments
Making timely payments is one of the key factors that will determine your credit score. Because late payments can cause your debt to grow and make it more difficult for you to pay it off, this is a critical factor in determining your credit score. The ratio of your available credit to total debt is another factor. Lenders are not happy when you have high credit debts. It is therefore important to keep your credit utilization under 30 percent. Credit score can be improved by not applying for new credit cards or paying off existing ones.
Your payment history accounts for 35% of your overall credit score. This information reveals if you have paid your bills on time and if you have missed payments. This information is used by lenders as a way to determine your likelihood of paying your debts on schedule. Late payments can hurt your credit score. However, if you have a track record of paying your debts on time, your score will be higher.
Correct inaccurate credit information
If you believe there is incorrect information on your credit report, dispute it with the credit bureaus. They will investigate the issue and give you a copy. The bureau might not agree with you, and the item will be added to your credit report. You can take steps to correct the error, such as contacting the creditor for clarification, or you can re-dispute it with more information.
To dispute inaccurate information, you can write a dispute correspondence. It should include a dispute form and copies of your supporting documents. The credit reporting company should receive your dispute letter using the dispute address. It should be sent certified mail, along with a copy of the return receipt.
Your credit score can be negatively affected by incorrect information. This can impact your ability to get loans and credit cards. While it is easy, the outcome can prove frustrating. However, it is worthwhile if the report you receive is accurate.