The annual credit report is a very important document for any citizen. If due to some reason your annual credit report presents a low score than it could alter your life drastically. Financial institutions will give you loans, and you might also face difficulties in getting a place on rent. So the million-dollar question is how to improve or maintain an annual credit report in the right way.
Step 1
This article will provide you advice on how get a better annual credit report. Here are four simple steps to improve your annual credit report.
Step 2
Make sure that the source is authentic.
The 1st step towards the right direction is to get the report from an authentic source. Federal law allows you to get a report free of cost from the three national reporting companies in a set of twelve months. So it is highly advisable to make sure that is the source of the annual credit report is authentic and believable.
Step 3
Pay your bills on time
Another simple step to do is to pay your bills within the due date. Often people just out of laziness allow the due date pass and pay surcharge. This also counts in the annual credit report. There are different solutions for this. Either you should add reminders in your phone of the due date, or you can set up automated payments from the bank accounts. The issue with the 2nd method is that you would have to keep enough money in a bank account, or it will generate an overdraft fee. Suit yourself with which ever method you are comfortable with.
Step 4
Understanding the credit score system
It is imperative to understand how your credit score system works. Contrasting popular belief annual credit report system is simple to comprehend. There are few things to you need check. As mentioned before an annual credit report tells if you have paid your bills on time or not, did your account get referred to a collection agency or did you declare bankruptcy at any point.
Step 5
The amount you owe to any financial institution is also checked. Another aspect of this is that, the Annualcreditreport also notes that your debt is close to your credit limit or not. If your borrowings are close to your credit limit, then in the annual credit report it will become a negative point.
If you have applied for accounts very frequently it can be a negative point. The numbers of accounts you hold are also noted. The numbers of credit cards are also added up. So make a mix and match b/w the accounts and credit cards. Too many accounts or credit cards will reflect badly on your annual credit report.
Removing inaccuracies:
You should review your report thoroughly. If any disrupting or negative information is present than you should take a close look and identify what caused these problems. If you think there is any wrongful or misleading information, you should write down a letter to the credit bureau. You should how you think the information is incorrect. Highlight the information you think is incorrect. Attach along your annual credit report along the letter.
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