What can you do about information on your credit report that's correct but damaging to your creditworthiness? Unfortunately, this is more difficult to resolve than simple clerical errors that might have been made on your report. Although there are "credit repair clinics" and "credit doctors" who claim to be able to help you improve your credit rating (for a fee, of course), they can't do much to get correct but negative information off your credit report. The only real solution is to understand how your creditworthiness is measured, and then start acting in a credit-responsible fashion. As time passes, prior slip ups become less important as you demonstrate that you are now less of a credit risk.
What are some specific things you can do to improve your credit?
- Try to pay your bills consistently and on time. This can be made easier by creating a budget and sticking with it.
- Try to reduce the amount you owe, and avoid using credit whenever possible. Consider a secured credit card instead.
- See if there are any open lines of credit on your credit report that you no longer need, such as credit cards that you don't use anymore. A large amount of this type of "potential debt" can scare away other lenders.
- Stay on your best behavior for seven years. That's when most negative information, such as late payments, accounts that your lender turned over to a collection agency, and court judgments against you, are removed from your credit report. (There are a few exceptions to this seven-year rule; for example, bankruptcy information remains on the report for ten years.) Your good behavior will pay off even before the seven years have passed, because more recent information is factored in more heavily than earlier information. On the plus side, positive information, such as a history of paying back debts on time, stays on your credit report forever.