Bad Credit Resource Center

Another common belief is that owing no money, not having credit cards, and essentially avoiding the whole world of credit will help improve your credit score.  The opposite is actually true - lenders want to see that you can handle credit, and the only way they can tell is if you have credit that you have handled responsibly.  Having no credit history at all can actually be worse for your credit rating than having a few credit accounts that you pay off cleanly.  If you currently have no credit accounts at all, opening a low balance credit card can actually boost your credit score.

Here are 3 more tips on our ongoing posts that can help you deal with your credit report so that you can give your credit score a boost:

Tip #7: Dispute errors you find on your credit report

Contact each of the three major credit bureaus -  TransUnion, Equifax, and Experian - and get copies of your credit reports and credit scores.  Carefully read over the reports and note any errors.  In writing, contact the credit bureaus and ask that mistakes be removed or investigated. 

This is called a dispute letter and once it is received, credit bureaus have to investigate your dispute within thirty days of receiving your letter.  It’s important to keep a copy of your letter and to note the date the letter was sent.  You should not be accusatory or abusive in your letter - just clearly state the problem and request an investigation. 

It’s also important to note that you’re aware the agency is required to investigate the claim within thirty days and note that you’ll follow up.  Be sure that you do follow up with the issues you raised in your letter - just because the agency investigates does not always mean that your credit report will be updated correctly. 

Many credit bureaus now make it possible for you to correct errors on your credit report online, and many have information on their web sites that tells you exactly how disputes must be handled to be effectively removed.  It’s important that you follow this information exactly so that the inaccuracies on your credit report are removed promptly and your credit score is updated as soon as possible.

Tip #8: Add a note to your credit report if there is a problem on the report you can’t resolve

There are sometimes legitimate reasons why you didn’t pay a bill or pay the bill timely.  If a contractor refused to finish a job or did a poor job, then you may have refused payment, but the non-payment may still count against you on your credit report.  If there are any unusual circumstances surrounding entries on your credit report that may affect your credit rating - such as a case of identity theft - you can ask that a note be attached to your credit report to explain the situation. 

Some lenders will pay attention to this and some will not, but it is a better solution than nothing at all.  Such a note will not affect your credit score but will affect your credit report. More importantly, it leaves a paper trail of the problem that lenders can look at if they choose.

Tip #9: Never do anything illegal to help raise your credit score.

It seems pretty obvious, but plenty of people try to lie about their credit scores or even falsify their loan applications because they’re ashamed of a bad score.  Not only is this illegal, but it doesn’t work. Your credit score is easy to check and not only will you not fool lenders but you may actually find yourself facing legal action as a result of your dishonesty.

If you want to improve your credit score, you need to go right to the source - your credit report.  Your credit report contains the information and data on which your credit score is based.  If you can alter or update the information in your credit report, your credit score will change to reflect the changes.  That’s why getting and checking you credit report is one of the first things you should do when you attempt to repair your credit score.

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