Credit
Correct Credit Report Mistakes
Check your reports carefully for errors—the law entitles you to correct mistakes:
- Write to the credit bureau that made the error.
- Clearly identify the information you are disputing and explain why.
- Provide facts to support your case.
- Ask the agency to remove the disputed information from your credit report.
Send your letter by certified mail with "return receipt requested." Enclose copies of supporting documents along with your report—circle disputed items.
Talk to the personal finance professionals at Hopewell Federal. We can help you understand and correct your credit report.
Ways to Boost Your Credit Score
Every time you apply for a credit card, mortgage, car loan, or insurance, your application is judged in part by your credit score. Lenders use your credit score to determine whether to grant credit, and at what cost. The higher the score, the more likely you are perceived to repay the credit. Consumers with scores less than 600 usually are seen as higher risk and may pay a higher interest rate or are denied credit.
Fortunately, you can take steps to boost your credit score. These tips can maximize your score and influence your credit-worthiness.
- Be punctual. Late or missed payments, foreclosures, and bankruptcies have the greatest negative effect on your credit score.
- Check your credit report regularly. Don't let inaccurate information ruin your credit score. Consumers are entitled to one free credit report per year from each of the three major credit bureaus (Equifax, Experian, TransUnion), which you can get online at annualcreditreport.com. Even though the credit report is free, getting your credit score will cost extra. You can obtain your credit score at myFICO.com, or from the individual bureau's websites, experian.com, equifax.com and transunion.com.
- Keep debt in check. Try to keep your account balances below 50% of your credit limit. For instance, if your credit card has a limit of $2,000, keep the balance less than $1,000.
- When shopping for a loan, submit your applications within a limited time. If done in a short period of time, multiple inquiries on a credit report will count as one inquiry to a potential lender looking at your report. Excess inquiries strung out over a longer period, however, could negatively affect your credit.
- Keep accounts open. Time is one of the most significant factors that can improve your credit score. Closing old accounts—especially ones with a good payment history—shortens your credit history and lowers your score. Lenders take into account the average age of your accounts, so an older account can help balance newer credit.
- Keep a healthy mix of credit. This includes things like a mortgage, a credit card or two, a car loan, and perhaps a retail card. Hopewell Federal can help you acquire the mix you need.
What's Your Score?
Who's keeping score? The credit industry is. Every time you apply for a new credit card, a mortgage, perhaps even an insurance policy or a job, your application is judged in part on your credit score.
A credit score is a three-digit number that lenders use to objectively measure your creditworthiness. Each lender sets different ranges for what it considers "good" and "bad" credit scores. Consumers with lower credit scores often pay higher interest rates on mortgages and credit cards because they're viewed as riskier customers (based on a scale of approximately 900 being a high score).
You are entitled to one free credit report a year from each of the three major credit bureaus (Experian, Equifax, Transunion), which can be obtained at www.annualcreditreport.com. You can also order your credit score at myFICO.com, or from the individual bureau's websites, experian.com, equifax.com and transunion.com. The people at your credit union can discuss with you your score in relation to your overall credit picture.