Simple ways to raise your credit score
Consumers often are unaware of their credit scores, but giving it some attention could save you thousands on a mortgage.
from the July 2, 2007 edition
Page 2 of 3
1. Get the data
Because credit scores are based on credit reports, anyone seeking higher scores needs to know what's in those reports. To get one free report each year from each of the three major credit bureaus – Equifax, TransUnion, and Experian – go to www.annualcreditreport.com.
Many companies will supply personal credit scores for a fee, but the formula that one uses to calculate a score may not be the same one influencing a lender's decisions. At www.myfico.com, you may sign up for a free trial of an online product that tracks his or her FICO score, the one most commonly used by lenders. Or go to www.bankrate.com and use the free calculator for a rough estimate.
2. Fix reporting errors
Mistakes happen, and they haunt consumers. Just ask Osa Meekins Jr., a retired mental health facility inspector for the state of Pennsylvania. His credit score hovers around a glowing 820, but when he applied last fall for a Brooks Brothers credit card, he was denied. The reason: a supposed lack of sufficient credit history. He set out to find the error and fix it.
"I spent hours online with Equifax," Mr. Meekins recalls. "When I called, I got only their automated system. It was a very frustrating experience." Finally, he met with a credit counselor who called Equifax and found the problem: It had mistaken him for his father, Osa Meekins Sr., who had been deceased for 20 years. Equifax fixed the mistake, and Brooks Brothers issued him a card.
Errors can include such negative marks as paid debts that are listed as unpaid or any defaults more than seven years old. (Federal law requires most negative items to be dropped from a report after seven years.) Reports list procedures for fixing errors, but consumers who don't get results may need to play hardball.
"Sometimes just having a lawyer step in [with a letter] will break the automation and get the bureaus to pay attention," says Liz Weston, an MSN Money personal finance columnist and author of "Your Credit Score: How to Fix, Improve and Protect the Three-Digit Number that Shapes Your Financial Future." "You have to balance that cost of hiring the attorney against the hundreds of thousands more that you would pay in interest if the error were allowed to stand."
RSS feed
