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Road to Financial Fitness Starts with Credit Report

By Faye Mergel
Published: Tuesday, January 26th, 2010

Anyone who has a financial resolution this year is most likely to include credit score improvement in it. Tidying up a FICO credit score can help a person get better loan rates at banks, mortgage lenders, and other creditors. Additionally, it allows one access to lower premium rates from insurers and more affordable monthly rent from landlords. But many people who want to boost their ratings do not know how to do it, prompting finance advisers to give their own tips.

Road to Financial Fitness Starts with Credit Report Checking a credit report is one of the first things advisers say consumers should do when trying to sort out their financial life. They liken credit report to a map that can guide them towards rebuilding or improving their ratings. There are so many television and Internet commercials trying to lure consumers by offering “free” reports. However, experts warn that not all of those sources really provide those documents for free.
In fact, consumers can be charged with $15 each month if they do not read the terms of those ads carefully.

According to the Fair Credit Reporting Act (FCRA), everyone is entitled to one free credit report each year from the three major bureaus—Equifax, Experian, and TransUnion. Jobless individuals and those who plan to seek work in the next two months are also entitled to one free report. Those who have been denied loans or have become victims of identity theft can also get a free report within 60 days.

Black marks such as delinquency, late payments, or loan defaults take years to remove from a report but inaccurate or fraudulent items can easily be removed by contacting proper authorities. First, one needs to contact his creditors and the bureau issuing the credit report and make sure both parties agree that there is indeed a mistake.

Afterwards, the consumer concerned can file for a formal dispute through writing. A bureau has 30 days to respond to such request. The official website of the Federal Trade Commission (FTC) has detailed and comprehensive guideline on how to carry those dispute.

After reviewing and correcting inaccuracies on a credit report, a consumer is most likely to see an improvement in his score. But those who do not see huge improvements are advised not to be discouraged since even a little boost in their ratings could go a long way when applying for any line of credit.

Specialists say it takes long to improve a rating but consumers can easily meet their financial resolution this year if they work towards it one point at a time.

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