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[C1272]Credit Score To Buy A House

by Elena Laramie, Ele

STEP 1: Know the score. What's your credit score? A recent study found that 63% of people don't know what their credit score is. So if you're not sure, now is the time to find out. Lenders use your credit score as part of their evaluation, and credit scores generally range from 300-850. Anything over 650 is usually considered a "fair" score that qualifies you for standard rates. The higher your number, the better shot you have at getting great interest rates.

So if your score is a little low, you'll want to boost that number. Otherwise, you could pay way more interest on loans and big purchases than you should.

STEP 2: Make sure your credit report is correct. There are a bunch of different factors that help determine your credit score. Things like your payment history...outstanding debt...length of time you've had credit...number of inquiries...and the type of credit you have make up your score. All this information is found in your credit reports.

If your information isn't correct, your credit score could be affected. Take a look at your credit report. Go through each section and make sure everything is 100% correct. There's a handy checklist you can use that'll show you exactly what to look for as you go over your credit report.

If you do find wrong information on your credit report, dispute the items with the credit bureaus to have inaccuracies on your credit report corrected. And now you can easily file your dispute online. The credit bureaus have 30 days to investigate your claim and make any appropriate corrections.

You'll find the creditor contact information right on your credit report.

STEP 3: Pay on time, all the time. It's simple: late payments, collections and bankruptcies have the greatest negative effect on your credit scores. By being punctual, you can keep your score up (and your interest rates down).

Some folks struggle with making payments on time. Are you usually late? The best thing to do is sign up for automatic payment. Or try banking online with email reminders. You'll be surprised at how doing something like changing your bill paying routine can help. And if you do pay on time—don't change a thing!

Following these 3 steps will get you headed in the right direction to a better credit score. By taking aim at a higher credit score, you're taking control of your finances. So the next time you need a mortgage, a car or any kind of credit, you'll know your number is going to get you the interest rate you deserve.

Credit repair advertisements claim to guarantee a quick fix on your credit report. They promise for a fee (not always disclosed at first) to clean up your credit history so that you can qualify for a new home, car, insurance, a job, or premium credit cards. Before you sign up with one of these companies, you need to know some facts.

The real facts on fixing your credit score

The real truth is that no one can legally remove information on a credit report. The Fair Credit Reporting Act (FCRA) allows you, the consumer, to request an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge to you. There are other steps that you can do yourself, without paying a credit repair company, such as:

*You are allowed a free credit report if a company denies you credit, insurance, or employment (if this is a part of your employment application) provided you request a report within 60 days of this denial. The notice will give you the name of the consumer reporting agency that provided this report. You can dispute information that this denial is based upon. Under FCRA, both the consumer reporting agency and the information provider are responsible for correcting inaccurate or any incomplete information in that report.

*Put in writing what information you believe to be inaccurate. Include copies of any documentation that supports your claim. Be sure to send this letter to the credit reporting agency, and send it certified mail so that you can prove it was mailed and signed for at their end.

*You will get a response within 30 days. During their investigation, they must forward all your documents to the merchant or vendor that provided the negative credit information and report back to the credit agency. If they find that the information is inaccurate, they must notify all three reporting agencies of their findings: Equifax, Experian and TransUnion.

*When the investigation is concluded, you must receive a copy of the results in writing and a copy of the dispute if it is changed. It the disputed item is changed, the credit reporting agency cannot put the disputed information back into your file unless it is verified as accurate by the merchant or vendor.

*The credit reporting agency must send notices of a correction to anyone who received your credit report in the past six months. You can also have a corrected copy sent to employers that did not hire you based on your credit report.

Removing a bad credit rating

When you have a bad credit rating based on negative information that is accurate, you can only wait for it to be removed over time. By law, a credit reporting agency can only report negative information for seven years and bankruptcy for ten years. For unpaid judgments, the reporting period goes back seven years or until the statute of limitations runs out. Criminal convictions and applications for over $150,000 of life insurance have no time limits. By starting to pay your bills on time and contacting the creditors that you cannot pay, you can start to change your credit profile to the positive side, but that will take time also.

If you do decide to use a credit repair company

Start by getting a free copy of your credit report. Then assemble all your credit card bills and write them down. This will give both you and your credit repair company a starting point. By law, credit repair companies must give you a brochure, ?Consumer Credit File Rights Under State and Federal Law? when you sign a contract for their services. This contract must clearly specify your rights, obligations and fees. The contract must also clearly detail the descriptions of the services they will perform for you, how long it will take to see the results, and any guarantees they offer you. Members of the National Foundation for Credit Counseling are non-profit organizations providing free and low cost services to consumers with a wide range of plans, covering most types of credit used, including home mortgages.

Credit repair companies can help if you're drowning in debt. Before you sign a contract, check out these low cost and free options you can do yourself.

Article Source : Pg. 18

About Author

Both Elena Laramie & Edward Vegliante are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Elena Laramie has sinced written about articles on various topics from Credit Card Offers, Finances and Free Credit Report Score. TransUnion's TrueCredit.com has helped millions of consumers successfully manage their credit. Through a suite of educational materials, free monthly newsletters and easy-to-use products, TrueCredit empowers consumers to achieve greater financial well-bei. Elena Laramie's top article generates over 246000 views. to your Favourites.

Edward Vegliante has sinced written about articles on various topics from Credit Cards, American Express Card and Student Credit Cards. Ed Vegliante runs http://www.credit-card-surplus.com , a directory of online credit card offers.. Edward Vegliante's top article generates over 60500 views. to your Favourites.