How to Correct Your Credit Report
If you find errors on your credit report, federal law gives you the
right to correct them. Be sure to talk with your housing counselor for
guidance.
If you find errors:
- Contact the credit reporting agency.
- Write a letter explaining what information is
incorrect, and why.
Unless your dispute is frivolous, the credit reporting agency MUST:
- Reinvestigate your claim.
- Correct wrong information.
- Delete any information that cannot be verified.
If you disagree with the results of the reinvestigation:
- Write a brief statement explaining your side
of the story. At your request, the note will be included with future
credit reports.
If negative information in your report is accurate:
- Only time will erase it.
- Credit bureaus may report negative information for seven years, and
bankruptcies for ten.
You can contact the three major national credit bureaus to see your
credit report.
Build Better Credit
Make an appointment with an AHC Counselor to pull your credit report
a few months before you plan to buy your house, so you have time to
correct your report before applying to a lender. A better credit score
can save you thousand in interest payments each month. If your credit
score is low, you will often get lower interest rates when you want
to borrow money. The following tips can help you improve your credit
and save a great deal of money over time.
Always pay your bills on time.
If you've been late in the past, recent timely payments can help your
score. Credit scores give recent payments more weight than those of
the past.
Don't Max Out.
Try to keep your credit card balances low.
Don't Overextend.
If you apply for too many credit cards, loans or accounts, lenders will
interpret this as a bad sign. It appears that you may spread yourself
too thin and may not be able to manage the various debts over time.
Try to pay more than the minimum.
Definitely pay the minimum to keep your score on track, but pay more
if you are able. Failing to pay the minimum will definitely hurt your
score, but paying only the minimum will be extremely expensive over time.
Click here for further information regarding minimum payments.
Don't Make Major Purchases. . .
Many prospective homebuyers make the mistake of buying a new car or making
other major purchases right before applying for a mortgage. These purchases
will decrease the amount of the mortgage that they would qualify for
and, in some cases, results in the denial of their loan applications.
For every $50 of excess debt, you can expect about a $5,000 reduction
in the amount of mortgage you qualify for. Click here to see if you
may have excessive debt.
Build a Credit History
If you have no credit history-good or bad-now is the time to establish
one. If you do not have a traditional credit record that shows payments
made on credit card purchases, a car loan or a student loan, it is
still possible to establish a credit history.
For example, you can build a nontraditional credit history by documenting
your monthly rent payments to previous landlords, to utility companies
for gas, electricity, water and phone services, to cable television companies,
to insurance companies for medical, automobile or life insurance, and
so on.
Click here for Non-Traditional Credit Documentation Samples.
 |
- Basics of Credit |
Build Better
Credit - |
|
|
