Sunday, September 2, 2012

How to Dispute Your Low Credit Score

There can be a number of reasons why an individual can have a low credit score. Your low credit score may be due to your credit misbehavior and mismanagement or it may be because of errors that have been incorrectly entered into your credit report and many other reasons. Upon receiving the credit report, many people assume that it contains accurate information. If you suddenly experience a huge increase in your interest rates or you have been turned down for a loan, it is time for you to check your credit report.

When you discover that your record is flawed and you believe it is not your fault, you should properly dispute the errors. This way, your low credit score will be fixed and only correct information can be found on your report.

Errors that Need Immediate Action

If you find that your score is low even though you have been making timely payments, look for issues that might need correction. These items in your credit report include:

    Payment history - The people assigned to input your payment history may make mistakes and as such, there may be inaccuracies. If you have been paying on time consistently and you have not missed any repayment schedule but your report says otherwise, dispute it. Make sure, though, that you have account statements to back your claim.

    Your account - Several errors may be associated with your account. Sometimes, your accounts may appear to be duplicated. When this happens, you may be shown to the creditor or lender as someone who have more debt than you actually have. Consequently, your creditor can increase your interest rate, particularly when they find your debt to income ratio too high for their standards. Another error involves an account that is closed by your creditor. Such a situation is often viewed negatively by lenders. Make sure that you dispute all the wrong details concerning your account to increase your score.

How to Dispute Errors

You will need all the evidences that will strongly support your case. Gather your credit statements, your bank account report, receipts, and transaction numbers if you have purchased anything online. Make copies of the documents and keep the originals in a safe place. You can choose to highlight the items in the documents that prove your point so that identification will be much easier.

After collecting and organizing your proof, you should now write your dispute letter. In this letter, write down your full name, your address, and the current date. The content should clearly convey the error in your credit report and the action that you would like to be performed to remedy the situation. For instance, if your problem is a duplicate listing of one account, this should be stated openly. You can then ask to have the duplicate removed to eventually fix your low credit score.

Send your evidence along with your letter. Make sure that you specify the documents that you have inside the envelope. Address the letter to the credit bureau that reported the wrong information. If two credit bureaus have inaccurate information, you will have to deliver two separate mails to them.

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