How To Get A Free FICO Score And Credit Report

FICO credit scores are an important factor which can greatly affect your financial opportunities. Every time you apply for a loan, mortgage, or new credit card, the bank you are dealing with will use your credit report and FICO score to judge how likely you are to make your payments on time. The higher your score, the more likely you are to repay the loan on time and without any problems. Banks love people with good credit, and will reward them with lower interest rates and better terms on their loans.

What is the Average FICO Score?

The range in which all FICO scores are located is between 300 and 850. With 300 representing the lowest possible amount of credit, and 850 representing the best possible financial reputation. The average American FICO score is approximately 720. This average score is viewed as a good level of positive credit history and is seen, by banks and lenders, as a safe investment, resulting in good interest rates. Anything below the 600-650 mark will result in higher interest rates and more restrictive loans.

How is My FICO Score Calculated?

Your Fair Isaac Corporation Credit (FICO) score is the numerical result of a very complicated mathematical formula, in which all of your previous financial history is processed. The resulting number will become an exact representation of your financial reputation. There are several factors which make up the foundation of this score, such as, amount of current debt, over due bills, previous bankruptcy, credit cards, and several other factors.

The most important thing you can do to keep your FICO score high, is to make all of your monthly bill payments on time. However, even if you have a perfect financial history, you can still fall victim to errors on your credit report, such as, fraud and outdated entries. This is why it is very important, for people of all credit scores, to check their credit report at least once a year.

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Example Letter to Dispute Your Credit Report

If you’ve just received your credit report and there are some mistakes on it, you will want to dispute it. Here is a template letter that you can use.

Checking your credit report is something that you should do at least once a year. You should ensure that all of the items are valid and that no mistakes have been made. If you do find a mistake, it could have implications for your credit score. You will therefore want to take it up with the Credit Bureau.

You can do this by sending them a letter complete with a copy (not the original) of your credit report. Highlight the errors on the copy of your report. Make a copy of any correspondence that you have sent.

Here is a template letter that you could use:

Date

Your Full Name

Your Present Address

Zip Code

Disputes Department

Name of Credit Bureau

Address

Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my credit file. Please find attached a copy of my credit file where I have highlighted these items.

This item (give details such as court judgement, credit agreement etc.) is (inaccurate or incomplete) because (describe what is wrong with the entry).

I have enclosed the following documents to support my claim (list documents such as payment details etc).

Please investigate my claim and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List of documents enclosed)

The credit bureau must then investigate your dispute within a period of 30 days. After this they should send you the details of their findings to you, in writing. This is the best way in which to get incorrect information removed from your credit file.

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How to Remove a Judgment from Your Credit Report

Being sued by a debt collector can be very intimidating. If you are being sued, never let a default judgment be entered. You have nothing to lose by disputing the validity of the judgment or even settling it out of court to avoid that nasty record landing on your credit reports.

The statute of limitations (SOL) on judgments is very long; usually 12 to 20 years. More and more collection agencies are starting to seek litigation simply for the fact that judgments are renewable. Once they get a judgment, it may be renewed if the creditor files a new suit seeking to renew the judgment prior to the expiration of the original judgment) therefore, technically, a judgment could follow you around for life.

Even if you pay a judgment you will be stuck with a ’satisfied judgment” for 7 years from date satisfied not filed! This can be a hopeless situation so avoid being sued at all costs!

However, if you already have a judgments reporting on your credit report, there are ways to have them removed. There are many strategies and options one could use to remove a judgment from their credit report. You have more rights and are protected by more federal and states laws than I could ever write about in one article. The most common is disputing it with the credit bureaus. Another way is simple to negotiate with the creditor. Many people use pay for delete letters when negotiating. Its always important to get the agreement between you and the creditor in writing as once you have paid; they have no other motivation to remove it from your credit report.

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Fixing A Credit Report

Fixing a credit report starts with seeing what’s on it. You may get access for free online. Try a search for “free credit report.” Alternately, when you are denied credit based on a report issued by a local credit reporting agency, you can request a free credit report from that agency within 30 days.

A quick look and you’ll have an idea why you were denied credit. Now how do you fix what you see? What if you find incorrect information on the report? What if you want to change information that is accurate, but unfair?

First, if there is anything you want to dispute in the report, you can write a letter to the agency. Tell them exactly what is incorrect, and they must investigate. Send copies of any documentation, such as canceled checks, and send it all by certified mail.

The agency must contact the source of the disputed information. If they recieve no confirmation within 14 days, they must delete the item from their files, and send you an updated report. You can demand that they send the corrected report to all creditors that recieved your credit report in the previous six months. This last part won’t be done automatically, so be sure to demand it.

Honestly, if the item is under $500, or is more than a year old, usually creditors don’t bother to respond. This means fixing a credit report is possible even if it isn’t incorrect. Also, if you don’t succeed on your first attempt, you have the right to dispute the item again after 30 days.

Put Explanations On Your Credit Report

When an item can’t be removed, you have the right to add a 100-word explanation permanently to your credit report. All who recieve the report will see your explanation. For example, if you had a valid argument with your doctor over a charge, you can explain the details.

Fixing a credit report may take a long time if it is based on a history of late payments and loan defaults. But even in this case, you can correct little errors, and explain anything that isn’t fair. This will make it look a little better while you start paying bills on time and doing the other things necessary.

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What to Do If You Find an Error on Your Credit Report

Especially if you’re trying to obtain credit, your credit rating is very important. If you have a negative remark on your credit report, work to remove it as soon as you can. If there is just one mistake on your credit report, your overall credit rating will be impacted, and this can make a huge difference in whether or not you’re able to get a loan. Luckily, there are ways to remove a negative rating so that your credit score can rise.

First, get copies of all three credit reports, one from each of the major credit reporting bureaus. Then, carefully check all of the information contained in the reports. If you do spot an error, there is a process to get it removed. Here’s how to get that negative entry removed so that your credit rating will improve.

The credit reporting companies offer an online form to help you through the process, but it’s actually easier not to use this form. Just gather your supporting information to prove that their information is incorrect, and then write a letter to the credit bureau. If you have a receipt, a bill showing that it was paid, or a letter from the creditor to state that the bill has been settled, you should send copies of this information with your letter, as they can help your case.

Be sure that you send this letter through certified mail and request a return receipt. That way you can be sure that they received your information. Once they get your letter, they will review your credit report, and notify you of their decision. If they decide in your favor, get another copy of your credit report so you can make sure that it has been removed from your report.

If you have a low credit rating due to your own actions, there is no way to completely erase that history. However, you can take steps to build good credit, which will raise your score. It will take time and effort, but it can be done. First, pay down your debt, especially credit card debt, and make all of your payments on time.

Another way to increase your credit rating by getting rid of your outstanding debts is by using a debt consolidation program following some effective procedures. Effective procedures mentioned in debt consolidation guide such as the Debt Free in 3 are guaranteed to have produce real results. These programs offer a loan to pay off your old creditors. Then, you’ll be making one payment a month, instead of multiple smaller payments to different companies. This is one way to show that you are taking steps to improve your credit rating through smart financial decisions.

To improve your credit rating, make sure that there are no errors in your credit report, and take care to reduce the impact of negative entries.

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