How To Get A Better Credit Rating

Check out the Credit Secrets Bible before you mess up your credit

In the US there are three credit report agencies, also known as credit bureaus. These three are Experian, Trans Union, and Equifax. The job of these companies is to keep track of your credit history and your ability to repay loans, like your mortgage, credit cards, etc. This is for present accounts and also all your past accounts, even if the account has been closed for years. Now when you think about that, you begin to realize that for millions of Americans, each with several credit references over the years, each of these credit agencies are responsible for maintaining tens of billions of records. And to complicate matters, some of your creditors only report to one of them, some report to two or all three of them, which means that you have a different credit profile on each credit bureau.

This gets even more complicated. Over the years, one lender may change from reporting to one credit bureau and start reporting to a different one. This is also a business, so they go where the best deals are. But the impact on you is that it is a fact that your credit report contains errors, and those errors will not get fixed if you do not take action to get them fixed, since the attitude of the credit bureaus is that if you do not care about those errors, neither do they.

This massive gathering of financial data about your credit history is compiled to create a credit score for you. And yes, you have a different credit score at each credit bureau since they maintain different data on you. This score reflects your ability and willingness to meet your financial obligations. Why should you care? Because the better your credit score is, the better deal and more favorable terms you can get from a lender.

For example, I know of people who were paying 8.25% on their mortgage, and with a better credit score, they were approved for 5.75%. Over the course of several years, this loan by itself with a lower interest rate will save them several thousand dollars.

Many people want the easy way out, so they pay fees for a credit repair service. This is not necessary and you are throwing money out the window. A credit repair service will not do anything that you cannot do yourself, but you need to be motivated to follow up on the various requests that you will be sending in. You see, you can dispute negative information that appears on your credit report, even if it is accurate. If it is not accurate, your job is easier because the credit bureau must remove the negative information if it cannot be proved. But even for negative information that is accurate, perhaps a loan from your past, the original lender may not be in a position to verify that data, and if it cannot be proven after you have disputed it, it needs to be removed from your credit report.

Get a copy of your credit report from all three credit agencies and then start going over that information and understand what it is saying. Look for things that would put you in a bad light if you were looking to approve or deny a loan request. When you find something, go through the procedure to dispute it, which will raise your credit score.

Jon is a computer engineer who maintains web sites on a variety of topics based on his knowledge and experience. You can read more about Improving Your Credit Score at his web site Raise Your Credit Score For A Better Credit Rating.

Check out the Credit Secrets Bible before you mess up your credit