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. FICO score reports are also available from many credit card companies. It is a good idea also to check your credit score at minimum three times per year.
Credit score can be affected with hard inquiries
You may not be aware, but hard inquiries can impact your credit score. This is when a creditor asks for your credit reports. 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 of your credit report can help you identify errors. You can also send a dispute notice to the credit bureau, along with the proof of the error. You can also contact your lender to dispute the inquiry and report fraud to the Federal Trade Commission.
A hard inquiry generally lowers your score by 1-5 points. The exact amount will depend largely on your credit score as well as the length of time since you last inquired. It is best to avoid making too many inquiries unless you absolutely need them.
When determining your credit score the most important thing is to pay on time
Making timely payments is one of the key factors that will determine your credit score. Late payments can make it more difficult to repay your debt. Another factor is the ratio of total debt to available credit. Lenders don't like it when people have high credit balances, so it is important to keep your credit utilization below 30 percent. It is possible to improve your credit score by avoiding credit cards, and paying off any existing credit cards.
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. Lenders look at this information to determine if you are likely to pay your debts on time. Late payments are bad news because they hurt your score, but if you have a long payment history, your score will be much higher.
Dispute inaccurate information on your credit report
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. However, the bureau may not agree with your complaint, so the item will remain on your report. You have options. Contact the creditor to get clarification. Re-dispute the error with more information.
To dispute inaccurate information, you can write a dispute correspondence. 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. It should be sent via certified mail, with a 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. While the process is not difficult, it can be frustrating if the result isn't in your favor. It's worthwhile if you get a complete report.