35% of your credit score is determined by your payment history. 30% is based on how much you owe your creditors in relation to how much available credit you have. 15% is the length of time or credit history. 10% is based upon how many accounts you’ve recently opened. And, 10% is determined by the types of debt you’re carrying; ie. revolving, mortgage, installment.
Having a good credit score is essentially cash in the bank. Good credit is the key to being able to borrow money from a bank at a low cost; or low rate of interest, so that you can use the banks money to purchase the things that you need, such as a home or a car.
It is extremely important that you actively monitor your profile from Experian, Equifax, and Transunion frequently; so that you don’t run into any surprises when applying for a loan. Now, in the event you may have negative items attributed to you, worry no more, because here we will show you how to remove those items and repair your credit score!
First tip is to find out what your credit report looks like. Start out by getting access to a free copy. Avoid websites that create their own version of a credit score. Scan through your free credit report to make sure everything that’s supposed to be on there reporting positively is… and that anything that looks like it shouldn’t be on your credit report isn’t. For example, what constitutes a negative item and why should it be removed? Better yet, are removing negative items legal? We all saw what happened to that poor women on 60 minutes two weeks ago who could not get a mortgage even though she assumed her FICO was excellent.
A negative item on one of your three credit reports could be a 30, 60, 90 late payment on a credit card or car loan, a collection account, a tax lien against a property that you own or any number of things along those lines. They may be legitimate items but the credit bureaus reporting of these items may be less than accurate… or factual shall we say. As a consumers we are protected by the “Fair credit reporting Act” and the “Truth in lending Act.” As such, we have the right to dispute or argue against any item on our credit report that may be deemed inaccurate.
Perhaps that 30 day late payment on your Visa card is reporting the wrong month it was late. Maybe the account number on the credit report differs from the sixteen digit account number on your card. Perhaps the debt was charged off and is reporting more than once therefore lowering your score. In any of these cases, you can simply write a detailed letter to each of the credit bureaus demanding that they immediately delete these items. Challenging negative items and ultimately removing them from each of your credit reports can go a long way towards increasing your credit score.