- Identify what the negative items are that reporting in your credit file. You can review all of your credit information here:www.annualcreditreport.com. AnnualCreditReport.com is the official site to help consumers to obtain their free credit report. It is a free service as long as you do not request your credit score. The individual credit scores usually cost around $7 each. The catch ‚ only one review per year is free. Once you know what the negative items are, you can begin correcting them. Review everything in detail, and if something is reporting inaccurately, request a dispute right on this web page. If you have outstanding collections/judgments/past due accounts, be sure to get them paid as soon as possible.
- Create some positive trade lines on your credit. A trade line is an account that reports to the credit bureaus. Typically, a utility bill or cell phone account is not considered a trade line, but an auto loan, student loan and credit cards are considered trade lines. Make sure that you have some positive trade lines of varying types reporting on your credit. If not, open one or two. A great way to get a loan or credit card when your credit is lacking or in rough shape is via a secured loan or secured credit card. US Bank has a great program for this, go and see my banker Emily Ervin in the Bloomington branch.
- Save documentation! If you pay something in full, get a paid in full letter from the creditor. Start a file on all the receipts you receive, as well as payments that you make.
- Follow up. If you review all three credit bureaus at one time, you cannot review them again for 12 months. Instead, review one report of the three, one at a time. I will review my report every 4 months by only reviewing Transunion, Experian and Equifax one at a time.
- Check with a professional. Credit experts and mortgage lenders can help you review your official report. If you can correct some things on your own, do that first before contacting a lender or credit expert. A great credit repair resource here locally is Warren Bauerfeld, 612-889-1117. Please mention us when you call him.
Lenders usually take a positive view of individuals with a range of credit accounts – car loan, credit cards, mortgage, etc. – that have a record of timely payments. However, a high debt to credit ratio on certain types of revolving (credit card) accounts and installment loans will typically have a negative impact.