Tips to Building a Better Credit Report

A credit report contains historical information on how you have been paying your bills, court cases filed against you or if you have filed for bankruptcy protection. Credit reporting companies can and do sell the information on your credit report to other businesses that may have a legitimate reason for it. These other businesses then use the information to decide whether to extend credit, insurance, lease or employment when you apply for these services. 

It's relatively easier to get loans and other lines of credit with low interest rates if you are armed with a good credit report. Low interest rates will help you save on monthly payments especially with a long repayment period and/or a high loan amount. The following 7 tips summarize some of the more common ways of improving your credit report. 

1. Find out what is in your credit report. You have the right to know what is contained in your report. However, you need to ask for this information. Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three nationwide credit reporting companies are using one website, one toll-free telephone number, and one mailing address for consumers to order their free annual report. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the form from ftc.gov/credit. Do not contact the three nationwide credit reporting companies individually. You may order your free annual reports from each of the credit reporting companies at the same time, or you can order them one at a time. The law allows you to order one free copy from each of the nationwide credit reporting companies every 12 months.
2. Improve your credit report by reporting any inaccuracies to the credit reporting company and by informing individual creditors or other information providers that you dispute an item.
3. Pay your bills on time. 
4. If your are having trouble paying your bills you may consider developing a realistic budget, getting credit counseling a from reputable organization, debt consolidation or even as a last resort bankruptcy. You may also consider contacting your creditors directly to set up a manageable repayment plan.
5. Consider using the services of a credit counseling organization. This is especially recommended when you're not disciplined enough to create a workable budget and stick to it, can't work out a repayment plan with your creditors, or can't keep track of mounting bills.
6. Protect yourself from identity theft.
7. Avoid financial scams by always checking reliability of any company you want to do business with. Be extra cautious by checking your local consumer protection agency or the Better Business Bureau in the company's location.