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. Credit card companies often offer free FICO score reporting. If possible, it is a good idea at least to review your credit score three times per year.
Credit scores can be affected if you submit hard inquiries
While you may not realize it, hard inquiries can negatively impact your credit score. 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 credit monitoring can help to identify errors. Send a dispute note to the credit bureau with documentation if you notice an error. To dispute an inquiry with the lender, you can also send a dispute letter to them. You can also report fraud to Federal Trade Commission.
Hard inquiries can generally reduce your credit score by one to five percentage points. The exact amount depends on your credit score, the time since your last inquiry, and how long it has been. If you don't absolutely need them, it is best not to make too many inquiries.
When determining your credit score the most important thing is to pay on time
One of the most important factors in determining your credit score is making payments on time. Late payments can make it more difficult to repay your debt. Another factor is how much credit you have available compared to your total debt. 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 information reveals if you have paid your bills on time and if you have missed payments. Lenders look at this information to determine if you are likely to pay your debts on time. Late payments can harm your credit score. However you'll have a longer payment history which will help your score.
Dispute inaccurate information from your credit report
The credit bureaus can be contacted if they believe you have incorrect credit reports. They must examine the error and provide you with a copy of your credit reports. The bureau may not accept your complaint and it will remain on your credit report. You have options. Contact the creditor to get clarification. Re-dispute the error with more information.
You can dispute inaccurate information by writing a dispute letters. Include a dispute letter and copies of supporting documents. Send your dispute letter to the credit reporting company, using the dispute address on the credit report. It should be sent by certified mail and accompanied with a return receipt.
False information on your credit reports can adversely impact your credit score. It can also affect your ability of borrowing money or getting credit cards. The process isn't difficult, but it can be frustrating if your results are not in your favor. It is worth the effort if you are able get an accurate report.