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Credit Report Tips-How you can handle your credit reports better

By Karen Anderson
Published: Saturday, June 26th, 2010

Any kind of investment in today’s world depends on the individual’s credit history. If a person wants to make an investment, the first thing he needs to do is see a creditor or a lender. Credit is a term used to refer the transaction where one borrows money from a creditor and uses the money to buy services or goods. It also includes a guarantee to pay the money back in timely instalments. Therefore, if a creditor has to lend you money for your investments, he will need to be sure that you can pay him back. Credit history gives him all the clues he needs to make this decision.

Your credit history will be found in your credit reports. Credit reports are prepared by three main agencies in the United States of America. These three companies are Experian, Equifax and TransUnion. Each of these three companies produce updated credit reports that can be requested by any creditor.

Each creditor will go through the credit history present on your credit report. If you have a clean credit history with not late payments or dues, you will have a high credit score and you will be approved for most of the investments and loans. However, a bad credit history will ensure that you do not get the investment you need. In such a scenario, managing credit reports will play a huge role.

The first step to effectively manage credit score and credit history would be to stay up to date with your credit report. A new federal law states that everyone is entitled to a new credit report from each of the three main agencies every year. Make use of this opportunity. Order reports regularly and check the reports often. It is best to order these credit reports through the government website as going directly to the agency might cost you some money.

Check each entry in your credit report with a lot of care. If there is any discrepancy or error, immediately take some action. Write a letter to the agency requesting an investigation in the matter. Take your credit report and mark all the entries that are erroneous. Add any receipts that might help you prove your point. Mail it to the agency. The agency will conduct an investigation and get the entry fixed. The agency should also send you a free copy once the error is corrected.

Credit is managed using simple steps. These steps include paying bills early. Bills must be paid as early as possible ensuring no late payments. This will also help you save some money as you will not be paying the extra late payment fee. Plan your finances carefully and decide a date for all the payments to go out. Keep your income and the date it comes in mind while planning payment dates. Try and reduce your debt as much as possible. Credit score will greatly increase if all your debts are paid off and you have just one low interest debt. Plan your finances with care. Take the help of the credit report and manage your credit scores effectively.

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