Low credit scores are relatively common at this time and the recession in the economy has just made it more acute. You can have a great credit score and miss just one payment and your score can dip as much as 100 points or more. One problem is that most people do not have any idea about how credit scores are measured, how they can drop and how to improve on them.
Credit ratings are based upon a composite of a few different things. Of course, it is somewhat based on if you make your payments in a timely manner but there are other things too. One of the most crucial things that the credit bureaus look for is the difference between how much credit you have available and how much you are using. If your credit cards and credit lines are maxed out at the limit your score is considerably reduced.
When you are looking at your credit keep in mind that the best credit scores go to the people who use only 30% or less of their available credit limits. You can raise your limits or pay down your balance to get below 30% but of course the best thing would be to never go above the 30% mark in the first place. Having accessible credit but not using it is a determination of a good credit risk.
The longer you have the credit the better for your credit scores. If you have an older credit card, use it regularly but make sure that your payments are made on time and that you never exceed the 30% rule. If you can pay it off every month and not carry a balance at all that is always the smartest move.
Individuals can dispute negative information on your credit report. Due to the Federal government enacted the Fair Credit Reporting Act in an attempt to protect consumers. If you have a negative mark on your report you have the legal right to dispute it. The bureaus and the creditors must then prove the accuracy of it within a certain period of time. If they neglect to prove that the information is correct within the allotted time period, then the information must be deleted from the report.
The creditors and the bureaus have 30 to 45 days from receipt of your dispute to prove the validity of their reporting. However, the benefit you have, as a consumer is that it is estimated that as many as 40% or all disputes are never verified. That means that up to 40% of all disputed information is removed from the reports. You can use that fact to your benefit.
Make sure that you keep meticulous and detailed records of your disputes. Be sure that everything is sent by certified mail and you have all of the receipts along with copies of the disputes. Do not dispute more than one item per letter. Send separate correspondence for each negative mark.
It may take determination and consistency to clean up your credit history but it can be done. It truly is your legal right to be able to know and control the information on your credit file and you have to use it to your benefit.
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