If you are looking to apply for any type of credit one of the things that you need to be know and understand where your credit standing is at. To get started you will need to pull all three of the major credit company's reports. Buy law you are able to receive these copies for free once a year. Copies of your reports can be found online or by mail.
Once you receive your copies the first thing that you want to do is make sure everything is correct and that there are no errors. If an error is found you will want to file a dispute. These can take a little time to clear so it's important to review your reports before you need to start applying for your credit or loans. If everything is correct the next thing that you will want to do is find any easy fixes.
Easy fixes include things like lowering your out standing balance on your current credit cards. An outstanding balance 0f 10% of your limit is about the best spot to be. The next easy fix is to pay off anything that is in collections that you are not disputing. Having an outstanding debit in collections will do more damage to your credit score then if you have the all the collectors paid off. It might be temping to close down an account but this can do more harm them good. The credit agencies like to see a long history of active accounts and reward this with a higher credit score.
Once you go though and dispute any errors and make the easy fixes it's a good idea to wait a few months before you apply for your loan if you are able to. This is important for a few reasons; one of them is that it can take a few months for the report to reflect the changes. The other main reason for waiting is to show a history of the lower balances and on time payments.
If you do all of these things your credit score should go up. If you're applying for credit on a large item such as a house or car adding a few points to your credit score can make a huge difference between what type of loan you can get. You might be able to go from not getting approved to getting a sub prime car loan, or better yet a prime loan.
Just remember that fixing your credit can take time, so be patient and remember that it is important to make your payments on time monthly.
Once you receive your copies the first thing that you want to do is make sure everything is correct and that there are no errors. If an error is found you will want to file a dispute. These can take a little time to clear so it's important to review your reports before you need to start applying for your credit or loans. If everything is correct the next thing that you will want to do is find any easy fixes.
Easy fixes include things like lowering your out standing balance on your current credit cards. An outstanding balance 0f 10% of your limit is about the best spot to be. The next easy fix is to pay off anything that is in collections that you are not disputing. Having an outstanding debit in collections will do more damage to your credit score then if you have the all the collectors paid off. It might be temping to close down an account but this can do more harm them good. The credit agencies like to see a long history of active accounts and reward this with a higher credit score.
Once you go though and dispute any errors and make the easy fixes it's a good idea to wait a few months before you apply for your loan if you are able to. This is important for a few reasons; one of them is that it can take a few months for the report to reflect the changes. The other main reason for waiting is to show a history of the lower balances and on time payments.
If you do all of these things your credit score should go up. If you're applying for credit on a large item such as a house or car adding a few points to your credit score can make a huge difference between what type of loan you can get. You might be able to go from not getting approved to getting a sub prime car loan, or better yet a prime loan.
Just remember that fixing your credit can take time, so be patient and remember that it is important to make your payments on time monthly.