Do Not Close The Credit Card Accounts You Pay Off

Before you start shopping for a home loan or auto loan, there is one very important step you must take.

You need to give yourself time to get this done before you start shopping for loans. You must check your credit and make sure that your record is as clean and accurate as possible. And that means starting probably a couple months in advance. You can get this free once a year right now. The very first thing you need to do is get your credit report from each of the credit bureaus. Each of the companies will have slightly different information on you, so getting all of them is very important.

They may range from quite accurate to wildly inaccurate. Check each report for accuracy. People have been know to find information from completely unrelated, unknown people. Include documentation if you have any. For each individual inaccurate piece, you want to write a letter to the credit bureau that has that information. One of the most common mistakes is to have the same account listed two times, with the information differing just slightly. Another is to fail to show when an account has been paid off.

This makes you look like you have more debt than you actually do, which lowers your overall score. Show that the debt is paid off, and you can bring your score up a little. If they do not, the item is corrected. For each item, the credit company that listed it has 30 days to dispute what you have said about it. It can also be good to ask companies that you are paying regularly but not showing on your credit report to share their information with the credit bureaus. All of these steps are things you can do quite legitimately and without paying someone to do it for you. Most will do this if asked.

The challenge, is remembering to, of course do this enough in advance to do you any good. Obviously there is a huge advantage for those who plan ahead. You have to request the credit reports, find the paperwork, receive them that supports any changes you want made, then wait at least 30 days to see what happens. There is one final way to improve your credit score. Do not close the credit card accounts you pay off. Pay down your current debts so that you don' t owe so much.

Long established accounts in good standing are beneficial to your credit history, more so if they are still open.