Your credit score is an important aspect of credit maintenance. You can easily check your credit score once a year or every four month. Many credit card companies offer free FICO score reports. It is also a good idea to check your credit score at least three times a year, if possible.
Credit scores can be affected if you submit hard inquiries
Although you may not know it, credit scores can be negatively affected by hard inquiries. This is when a creditor asks for your credit reports. These inquiries are often due to an identity theft or mistake and you may not even be aware until they become a significant number. Routine monitoring your credit report can help identify errors. You can send a dispute correspondence to the credit bureau if you find an error. You can also contact the lender and dispute the inquiry.
Generally, a hard inquiry can lower your score by one to five points. The exact amount will depend on your credit score and the amount of time since your last inquiry. Avoid making too many inquiries unless absolutely necessary.
When determining your credit score the most important thing is to pay on time
Paying your bills on time is a key factor in determining credit scores. Late payments can make it more difficult to repay your debt. Another factor is your credit utilization relative to your total debt. Lenders are not happy when you have high credit debts. It is therefore important to keep your credit utilization under 30 percent. Avoiding new credit cards and paying down existing ones can help improve credit scores.
35% of credit scores are determined by your payment record. This tells you if your payments have been made on time and when you've missed them. This information is used by lenders to assess your ability to repay your debts on a timely basis. Late payments hurt your credit score. But if your payment history is long, you will have a better score.
You can dispute inaccurate information in your credit report
If you feel that your credit report contains incorrect information, contact the credit bureaus to dispute it. They will investigate the issue and give you a copy. The bureau might not be able to agree with your complaint so it will remain on the credit report. You have options. Contact the creditor to get clarification. Re-dispute the error with more information.
To dispute inaccurate information, you can write a dispute correspondence. It should include a dispute form and copies of your supporting documents. The credit reporting company should receive your dispute letter using the dispute address. It should be sent via certified mail, with a return receipt.
Correct information can cause a drop in your credit score. This can make it difficult to obtain loans or credit card applications. While the process is not difficult, it can be frustrating if the result isn't in your favor. It's worthwhile if you get a complete report.