Credit Score

How to Improve Your Credit Score The Right Way

Okay, now you know your score, and you have a good idea of what goes into creating it. So, how do you make it better?

Step 1: Start with Your Credit Report Because your credit score is based on your credit report, you should begin by ordering your reports from all three credit bureaus and reviewing each one for accuracy. You can get your reports from a service such as MyFico.com, or order from each bureau separately online or by phone:

Equifax
www.equifax.com
800-685-1111

Experian
www.experian.com
888-397-3742

Trans Union
www.transunion.com
800-888-4213

If you’re accessing your reports online, you might want to print out the files to make the review process easier. At the very least, grab some paper and a pen to make a list of the changes needed as you go through the reports. Exactly how your information is organized varies from report to report.

Check the Identifying Information. At the top of each report is identifying information about you. Watch especially for the following:

• Names that aren’t yours (not just misspellings of your own name
• Social Security numbers that don’t belong to you
• An incorrect birth date
• Addresses where you have never lived
  

These are the kinds of errors that could indicate someone else’s information is in your file.

• You might find other errors, such as an employer listed that you no longer work for or a misspelled address.
  
• You can ask the bureau to fix those problems as well, but that shouldn’t be your highest priority.
• Carefully Review the Credit Accounts

The next section lists credit accounts that you’ve opened, along with such information as the date you opened them, whether the account is still open or now closed, the type of account, the account number (typically abbreviated),your payment history, your credit limits, and your balances. Scan this section closely for the following: Accounts that aren’t yours

• Delinquencies that aren’t yours (including late payments and charge-offs)
• Late payments, charge-offs, or other negative entries other than a bankruptcy-that are more than seven years old
• Debts that your spouse incurred before marriage (unless they improve your credit history-more on that later)
• Any other incorrect account notations, such as showing a debt as past due when it was wiped out in a bankruptcy filing

If you find a number of incorrect entries, especially if they’re delinquent or unpaid accounts, you could be a victim of identity theft. On the other hand, you could be suffering from a credit bureau mix-up that accidentally merged someone else’s information with yours. Although the bureaus say they have improved their systems to reduce the chances of this happening, it still occurs. I hear about it most often when two family members share similar names. Don B. and his father have the same first and last names and share a middle initial. They live in different states (Florida and Indiana, respectively) and, of course, have different Social Security numbers. That hasn’t prevented the credit bureaus from getting the two men confused. When Don bought a piece of property recently, the bank pulled his credit reports from all three bureaus. He discovered that his and his father’s credit information had been mixed together. You might find other errors, such as accounts you’ve long since closed still being reported as open, or not indicating accurately that you-rather than the creditor-closed the account.