A credit score is a key aspect of maintaining credit. You can easily check your credit score once a year or every four month. Credit card companies often offer free FICO score reporting. If you are able, check your credit score at the least three times per annum.
Credit scores can be affected if you submit hard inquiries
Even though it may seem counterintuitive, hard inquiries can adversely impact your credit score. This happens whenever a creditor makes an inquiry into your credit report. These inquiries are often due to an identity theft or mistake and you may not even be aware until they become a significant number. Routine monitoring your credit report can help identify errors. You can send a dispute correspondence to the credit bureau if you find an error. You can also contact the lender and dispute the inquiry.
A hard inquiry generally lowers your score by 1-5 points. The exact amount will depend on the credit score you have and how long ago it has been since your previous inquiry. It is best to avoid making too many inquiries unless you absolutely need them.
Making payments on time is the most important factor in determining your credit score
Paying your bills on time is a key factor in determining credit scores. This is because late payments can compound and make your debt difficult to pay off. Another factor is your credit utilization relative to your total debt. High credit balances are a problem for lenders. Keep your credit utilization to a minimum of 30 percent. Your credit score can be improved by paying off your existing credit cards and avoiding new ones.
35% of your credit score is determined by your payment history. This will tell you whether you've made your payments on-time and how many times missed payments. This information is used by lenders to assess your ability to repay your debts on a timely basis. Late payments will hurt your credit score. However if you have a history of making regular payments, your score is likely to be higher.
Refute incorrect information on your credit reports
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 may not accept your complaint and it will remain on your credit report. You have two options: you can contact the creditor to clarify the matter, or you can re-dispute the item with more details.
To dispute inaccurate information, you can write a dispute correspondence. Include a dispute letter and copies of supporting documents. You can send your dispute letters to credit reporting companies by using the dispute address found on the credit reports. It should be sent certified mail, along with a copy of the return receipt.
Incorrect information on your credit report can negatively impact your credit score, which can affect your ability to obtain loans or credit cards. Although the process is not complicated, it can be frustrating if you don't get your desired result. But it's worth it if you can get an accurate report.