If you are thinking of applying for a loan, it will be a good idea to first check your credit score. This will give you an indication whether your request will be approved or not and how much interest you will have to pay.
So how do you check your credit score? For that, you will need to get it from a credit agency. These three are namely Experian, Equifax or Transunion. People can log in to their site and request a copy which is absolutely free.
Your credit score could range from 350 to 750 points and the higher it is, the better. If your score is below 700, then you need to improve on it.
You do that by knowing your current credit score and then reviewing it. Look for errors and if there happens to be some, take the appropriate steps to fix them. You should call the credit agency to report the error and then send the supporting documents by mail.
Never send the original copies because if they lose it, you have nothing left to support your claims so send photocopies.
The next step is for the crediting agency to conduct an investigation into the matter. If your creditor cannot produce anything, then the error is immediately removed from your record and a revised copy will be sent to you free of charge.
But if the report is correct, then you will have to take the appropriate steps to remove it. Your credit score may go down depending on your credit history. If you have unpaid loans or have incurred late payments in your credit card, then you have to pay them.
Remember that these things will be in your credit report for the next 7 years while filing for bankruptcy lasts for about ten so you can’t run from it.
You will have to find a way to come up with the money by working overtime, cutting down on your expenses, getting a second job or selling some of your valuables. If you don’t know what to do, it wouldn’t hurt to swallow your pride and ask for help as there are financial advisers that are willing to help you go through this time.
If things are not that bad, perhaps you can make a deal with your creditor so this will not appear on your record thus having no effect on your credit score. Just make sure you stick to the bargain because if you fail to do so, don’t expect them to be so generous the next time this happens.
A year later, you can request for a new copy of your credit report to see if the steps you have taken have paid off. If you see a significant improvement versus the year before, you know you are doing something right and you won’t have a problem anymore applying for a loan.
Checking your credit score is something people should do regularly by getting a copy from a crediting agency. There are three to choose from and you can get a copy from all three at the same time or every few months.
The scoring system used by all three are different but all point to one conclusion and that is whether or not you have good or bad credit.
