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4 Steps to Improve Your Credit Report

Your credit report contains information on the majority of your credit accounts, payment history, account balances, credit history, credit inquiries, etc. It also provides additional personal information. Why is all of this information important? This information is all used when calculating your credit scores.

Considering how many aspects of your life are affected by the state of your credit score, you can understand why it’s so important to monitor your credit report. You need to regularly set time aside to “clean up” your credit score. Otherwise, you’ll run to the bank in need of business (or personal) financing and be unable to secure a loan. If your suffering from a bad credit score, consider the following steps you can take to improve your situation.

Step 1 – Review

Start by reviewing your credit report. The Fair Credit Reporting Act entitles you to one, free credit report every 12 months from the three major credit-reporting agencies (Equifax, Experian and TransUnion). Don’t wait until you’re in need of financing to try and make sense of what’s on your report.

Step 2 – Make a List

While it won’t be the most interesting read, it is important for you to take the time to go over every line of your credit report. If you find any part of the information is incorrect, start making a list of the items that need to be addressed. All account information must be accurate: account balances, payment history, recent credit inquiries, etc. Keep in mind that while some information will not affect your credit score (e.g. name and birthdate) it could indicate identity theft.

Step 3 – File Formal Disputes

Upon close examination, did you discover accounts that you didn’t recognize? If you did, it’s time to contact the credit bureau. Verify with them that the negative information associated with that account actually belongs to you. Believe it or not, it is possible for a mistake to be made and the wrong information to be included in your report. If the problem you found is identity theft, it needs to be handled right away.

Step 4 – Check, and Check Again

When it comes to disputing mistakes, it’s really important that you are thorough. If you find a major mistake on one report, make sure you order your credit reports from the other two bureaus as well. You need to determine if the issue is limited to one bureau or lender, or if the problem is even larger than you initially realized. Make sure you follow up on your dispute(s), document every conversation and takes notes when you speak with each bureau or lender.

What are Your Options Right Now?

Bad credit not only negatively affects your personal life, but your business aspirations as well. A bad credit score will seriously limit your business funding options, or even prevent the possibility of being approved for a merchant account. Thankfully, alternative lenders like First American Merchant have stepped in to offer relief for entrepreneurs who find themselves in this situation. If you’re currently struggling with a bad credit history, consider how a credit repair merchant account can help you get your business off the ground – and help you repair your credit score.