One of the most important aspects of maintaining good credit is knowing your credit score. Your credit score can be checked free of charge every four months, or once per year. Most credit card companies also offer free FICO score reports. It is also a good idea to check your credit score at least three times a year, if possible.
Credit score can be affected when you make hard inquiries
Hard inquiries can have a negative impact on your credit score, even though you might not be aware. When a creditor inquires about your credit report, this is called a hard inquiry. These inquiries are usually the result of identity theft or error and you might not notice them until there is a large number. 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 generally lowers your score by 1-5 points. The exact amount depends on your credit score, the time since your last inquiry, and how long it has been. If you are not absolutely required to, it is better to limit the number of inquiries.
In determining your credit score, the most important factor is making timely payments
When making your payments on time is an important factor in determining your credit score. It is important to make timely payments because late payments can lead to increased interest and make it difficult for you debt to be paid off. Another factor is the ratio of total debt to available credit. High credit balances are a problem for lenders. Keep your credit utilization to a minimum of 30 percent. Avoiding new credit cards and paying down existing ones can help improve credit scores.
Your payment history accounts for 35% of your overall credit score. This tells you if your payments have been made on time and when you've missed them. This information is used to help lenders determine if you're likely to make your payments on time. Late payments will hurt your credit score. However if you have a history of making regular payments, your score is likely to be higher.
Correct inaccurate credit information
If you believe there is incorrect information on your credit report, dispute it with the credit bureaus. They must investigate the matter and send you a copy. The bureau might not be able to agree with your complaint so it will remain on the 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.
The best way to dispute inaccurate information is to write a dispute letter. It should contain a dispute document and copies supporting documentation. Send your dispute letter to the credit reporting company, using the dispute address on the credit report. You should send it by certified mail with a receipt.
Your credit score can be negatively affected by incorrect information. This can impact your ability to get loans and credit cards. It is not difficult but it can be frustrating when the results aren't in favor of you. If you are able to get a thorough report, it is worth the effort.