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by: RobKosberg
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Good credit is absolutely vital in our country. Many mistakes are made and well documented in handling credit yet no one would argue how important it is to maintain good credit habits. The following is a few basics that will help you improve your scores.

Step 1: Determine what you have that needs to be fixed. You will want to go directly to the sources of your credit and get your reports from www.equifax.com, www.transunion.com, and www.experian.com. These are the bureaus that your creditors report to and it is important to see exactly what items are either incorrect or derogatory.

Make sure that you order your reports from these three bureaus and not go to any free credit report offer. Many times you will find that the report is not free and they do not offer your score either. They are primarily interested in upselling you into some sort of monthly credit monitoring plan.

Upon receiving your three reports go through each one painstakingly. Though much of the information is redundant you will find that each one is reflecting a different score for you. Each bureau reports based on a different matrix and many creditors do not report to all three bureaus. Take note of every late or public record on each report.

Step 2: Dispute. When you begin the dispute process always write your dispute letters in your own words. Do not use the forms provided by the bureaus. Disputes are handled by real people and should be treated as such. Employees at credit bureaus are trained to sniff out credit repair companies and false disputes so you are always better off putting the dispute into your own letter in your own words.

Challenge all the inaccurate information on your report. It can make a huge difference in credit score very quickly. If there are derogatories on you report that are in fact yours then it is best to begin by contacting the creditor directly. Creditors will often remove derogatory information at the request of a current client. Sometimes putting pressure on them to act in your behalf by threatening to close the account if you are not satisfied will produce quick results.

Step 3: Wait it out or pay it off. Something to be aware of is that almost all derogatory credit "falls off" a report after 7 years. If you have credit issues that are old you may be better off waiting for those to come off by themselves rather than investigating them. The 7 year waiting period is from the last activity on the account. I have seen credit situations that reactivated because a dispute was issued on an old item. If this happens and the item is found to be valid then your score will drop and the clock will reset for 7 more years.

You can see an immediate benefit to your score by adjusting the balances of your credit cards. A good rule of thumb is to never allow your cards to go over 50% of available balance and preferable 30%. Having one card at zero and another maxed out will cause a lower score than having each card at 30% of max. Transfer part of the balance onto that card with zero and balance your accounts.

Step 4: Be cautious in establishing new credit and especially don't close old accounts. It's important to know that one of the major contributing factors in your credit score is the length of time that credit has been established. Older accounts, even ones you've not used, will positively effect your score. Newer accounts will skew the average and lower your score.

If you're reading this then you know the importance of maintaining excellent credit. These simple steps will help you improve or maintain your credit. Sometimes it is helpful to obtain professional help from a credit repair agency but before you spend the money these simple steps may do the trick.

About the Author

If you are in the early stages to Buy a Home then check out Rob Kosbergs' Complete FREE Guide on Buying your Dream Home with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog

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