5 Ways To Improve Your Credit Report

1. Get a copy of your credit report and look it over carefully. See if any obvious errors jump out at you, such as accounts you didn’t open, bad credit loans, or payments you didn’t miss. If you happen to see any fraudulent accounts on your credit report, you need to get them removed as soon as possible. Millions of credit transactions take place every month and it’s always possible that a simple mistake has taken place, but you don’t want somebody else’s mistake looking like one of yours.

It’s a good idea to review your credit report at least once per year. You know the old saying: An ounce of prevention is worth a pound of cure. It couldn’t be more true here! You can find your free credit score by going directly to companies like TransUnion Canada or Equifax USA and Equifax Canada

2. Do you have any credit cards you’re not using? If what’s in your wallet isn’t being used, you should close the account because open accounts sitting on your credit report are reducing your credit worthiness. The reason for this is because available or “open” credit is often viewed as negatively as utilized credit. Plus, if you close credit card accounts that you’re not using you won’t be tempted to buy that awesome set of steak knives you saw advertised on your satellite TV at three o’clock in the morning while you were eating that monster bowl of ice cream.

3. Even if you have a balance on a credit card, call the credit card company and cancel the account. A lot of people don’t know this, but you don’t have to have a zero balance to cancel an account. You can cancel the card and pay the account off under the terms of your card membership agreement. Don’t believe me? Dig out the terms and conditions disclosure you got in the mail when you received your card and you’ll see that I’m right on the money. Not only will this help improve your credit score, but you’ll find it easier to sit down or close your purse.

4. Do you have late payments languishing on your credit report? If you do, and you’re current right now, you can call the creditor and ask them if they’re willing to change that late payment to an on-time payment. You have about a 50% chance of getting your late payment removed, but it’s better than the 0 % chance you have by not asking!

5. Do you have any charged-off accounts or missed payments on your credit report that are older than two years? If you do, there’s an excellent chance you can get those entries removed as well. In most cases, creditors are only required to keep records for credit transactions for two years. Simply write to the credit reporting agency and dispute that entry and asked for written verification of the accuracy of that record. If the creditor can’t prove it, the credit reporting agency is required to remove it.

This entry was posted on Monday, January 21st, 2008 and is filed under Credit Reports. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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How Credit Scores Affect Mortgage Applications

With a good credit score an applicant will receive prompt response from many lenders, all of them offering low interest rates and low down payment options. The loan amount offered also may be high. On the contrary a low credit score would result in a lot of rejection from various mortgage financers. Because creditors wouldn’t come forward easily to give credit to individuals that have a history of difficulty in repaying existing loans. After all, creditors take risk when they finance mortgages against the credit history of a debtor. Naturally, they will wish to remain on the safe side and pick up less risky ones that have good credit histories. A good credit score means less chance of missing on payments and therefore less risky.

But there are some real risk takers that will come forward to finance mortgages for individuals with bad credit scores. They would charge high down payments and always high interest rates though. They may also fix additional charges for every little paper work and may charge high closing rates. The loan amount offered will also be considerably less. The individual with poor credit scores will not have much choice but to accept the terms and conditions as there are no other alternatives. This is a tight situation and to avoid this you must have a good credit score.

People with bad credit may fall in to the trap of ’secured loans’. Secured loans are the ones where the loan applicant offers an asset as collateral security. The lender becomes secure about the repayment of the loan and not the borrower. Securing a loan with bad credit score becomes easy only when the applicant is willing to offer some asset as collateral security. This again is a very dangerous situation where an individual runs the risk of losing his entire collateral asset in case of failing to pay the loan installments in time. An individual should always avoid such type of a loan.

Resort properties normally require large amounts of finance which a person with bad credit may find it difficult to obtain. So it is always advisable to keep your credit score high. Incase the credit score becomes low due to unavoidable financial reasons it can be improved upon. There is no need to lose hope simply because a person has a low credit score. If the property that he intends to buy has good equity he should go out and try to obtain finances for it. There are many sub prime lenders willing to offer their services.

For a review of your credit report as it relates to a mortgage loan and a consultation on the best loans available to you, give us a confidential, no obligation and no cost call.