Use these tips to give your credit profile the



"tune-up" it needs for 2003.

Tip #1- Check for Errors

Your credit report or profile is more than just a

collection of who your creditors are and how much

you owe them or have paid them.

The first thing you need to do is carefully check that

your credit report is accurate. Nearly 70% of credit

reports contain errors.

These errors may be as simple as an incorrect

middle initial or address. Or it could be as serious

as a creditor reporting that you were late with a

payment when in fact you were not late at all.

This error might not seem like a big deal to you. However,to a future lender like a mortgage company it makes a big difference !

Carefully examine your credit report and if you find an

error contact your creditor and the credit bureaus. Catch

and correct these errors now before it hurts your chances

of securing credit in the future.

Tip #2 - Correcting Errors

The two most common errors contained in credit reports

are:

1) wrong account information

2) incorrect recording of late payments.

If you find an account reported that does not belong you,

you need to contact the credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft.

Hopefully you'll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when they report an account belonging to a family member or someone with a similar name on your credit report.

If your problem is an error in reporting a late payment

you will need proof to back up your case before this error

can be corrected or removed. The most common error occurs when a payment is reported as "late" when it was actually a current or "on time" payment.

In either case, the problem can and should be corrected.

You will need to correct the error in writing. Keep a journal or log of all calls and correspondence.

The Fair Credit Reporting Act (FCRA) requires the credit

bureaus and the agency reporting the information to the

credit bureau to correct inaccurate information in your

credit report. Therefore, it is important that you contact

both the credit bureau and the creditor whose information is in dispute.

A sample letter is included here to help you in correcting

your credit profile. Make sure that you clearly identify the information that you dispute, include copies of receipts or documents that support your position. Then request that the information be corrected or deleted from your file.

Send your letter by certified mail and request a return receipt from the recipient. Keep all correspondence that you mail out. Give the agencies involved 30 days to begin their investigation. You can call them but be aware that phoning them does not protect your consumer rights! You must notify them in writing to protect your rights.

They must notify you of the results of their investigation.

Although the process will take time, it's important to do it. This is your credit profile, your "consumer identity" that is at stake. Don't expect an error to correct itself.

At your request, the credit bureaus must send notices of

corrections to your credit profile to anyone who has requested your report in the last six months. If you applied for a job and were turned down because of inaccurate information in your credit report, you can have the corrected report mailed to anyone who received a copy in the past two years.

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Sample Dispute Letter

Date

Your Name

Your Address

Your City, State, Zip Code

Complaint Department

Name of Credit Reporting Agency

Address

City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received. (Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe

what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

Originally Posted at http://www.ftc.gov/

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Tip #3 - Budget Planning

You can also use your credit report to help you plan and

implement a personal budget. Your credit report will show

you where you are spending your hard earned dollars. While the credit card balances may not be completely current, you'll still see which of your cards has the highest balance outstanding.

If you have more than one major credit card you should

compare the annual percentage rate (APR) you are paying

on each account. If you are working on a budget to "pay

down" your credit cards, start by paying down the one with the highest APR or interest.

Once that credit account is paid off, move toward paying

off the account with the second highest APR. Using this

method you will be able to concentrate your efforts toward paying down your outstanding credit obligations.

You should also check with your credit card company to see what's the best annual percentage rate (APR) they can offer you. If you are a good customer, you can often qualify for a lower rate than what you are currently being offered.

Caution: Ask if the new rate you are getting is a "promotional" rate or a "contract" rate. A promotional rate will expire at the end of the promotional term, for example 6 months. A contract rate does not have an "expiration" as long as you continue to meet the terms outlined by your creditor for that rate.

Tip #4 - Making a major purchase

If you are considering a major purchase such as a car or a

home, checking your credit report gives you the chance to see what a potential lender sees and uses to judge your credit worthiness.

You want to make sure that your credit report is accurate

before you apply for that sports car or new home. Errors

or problems can be corrected before your lender can use

those against you and deny your credit request. You'll also have a better idea of what type or rate of credit you should expect from a potential lender.

Tip #5 - Check your credit report regularly

Check your credit report regularly. Guard your "consumer identity" as you would anything else you treasure. Use your credit wisely, along with these tips, and you will enjoy the benefits that your good credit and your good name deserve now - and for years to come.