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Anytime you apply for a loan with any type of
lending institution your credit report comes
into the picture. This report is an overview of
your credit history that contains past and
current accounts, payment history, and balances.
The credit report is a primary tool used by
lenders to determine the level of risk they take
when extending you credit.
For many people, the credit report is just a
formality. But for over 65% of the population,
it can mean the decline of their loan
application. Why? Because their report shows
negative, misleading or inaccurate entries.
Viewing Your Credit Report
Practically no one reviews their credit
report as often as they should. If you have not
read yours within the last year, it is strongly
advised that you do so now.
Simply contact your local credit bureau, and
request that a copy of your credit report be
mailed to you. You can find agencies in the
yellow pages of your local phonebook listed
under "credit bureau." There is normally a small
charge for generating and mailing you the
report.
Once you receive the document, review it
carefully. Look for negative, misleading, or
inaccurate information. If you find entries like
these, you have the full right to dispute them
and have them corrected or removed.
Repairing Your Credit
The process of changing your credit history
is often referred to as "credit repair." To
start, write a letter to the credit bureau
stating one discrepancy in your report. (Your
credit-reporting agency will correct only ONE
item at a time.) Request that they investigate
the entry and provide you with proof of its
accuracy. Do the same with each additional
incorrect or negative item.
Should the bureau not be able to prove that
the entry is accurate, it will be removed from
your report. Likewise, if the agency is unable
to prove the entry within a "reasonable" amount
of time, it will be removed.
Because these agencies are extremely busy, it
is always wise to correspond with credit bureaus
via registered mail, return receipt requested.
This service is available from your local post
office.
In addition to repairing actual entries to
your report, you can also improve it by:
* maintaining your employment and residence
status for at least TWO years.
* not carrying your credit card balances
near, at, or over the credit limit.
* paying your minimum payments on time and in
full, as required by your monthly statement.
Each of these actions proves stability -
something lenders specifically look for on all
applications.
Often times, your credit report can be
greatly improved simply by disputing items that
are misrepresented or misleading. With a little
attention and legwork, you might be able to
significantly increase your chances of getting a
loan.
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