A good credit history is not only needed for a new credit card. If you are trying to be hired into a corporation, or you need to start a new business, you will need to prove you are a good debts payer. Here are the three major steps needed to build a credit report:
1. Request the credit report
The credit report can be requested from any bank for a fee, but you can also call the Credit Bureau directly. In this case, you will need to write a request, and the answer will come in maximum 15 days.
Find somebody that can read it for you. If you don’t have negative reports, you could easily read the report. On the other hand, if you have negative records, several banking and juridical terms will appear. Calculate the total outstanding debt, make a plan for paying them in the future and make sure you have enough reimbursement resources before requesting a new credit.
2. Deal with the negative reports
If you have negative report, it doesn’t necessarily means you are a bad payer. The majority of institutions have automatic programs to send data to the Credit Bureau, and sometimes those records are sent even if you have paid your debt. For example, if you are paying your rates with cash, the money could be recorded in the systems of the bank a little later. If the software finds your debt during that time, it might report it.
In this case, you will have to prove you have paid your debt. Keep all the payment proves, and send them to the respective institution to delete the negative reports.
You should ask for this report at least once or twice a year. If the records are getting old, you might not have the chance to prove your good will after a while.
3. Take legal actions if needed
Some people avoid suing the institution that made a wrong record, thinking that the lawyers and the process might be costly. First, the majority of the institutions that made a mistake are obliged to correct it immediately, even without a lawsuit. Second, even if the company does not approve to delete the record, the money spent on a lawsuit will surely worth the trouble: the negative record might affect you on the long term, so it is better to take the required actions now.
No matter if you are looking to improve your credit scores to buy a new house, getting a business loan or to buy a new car, having a good credit score is critical, specially now a days because it will be required even to rent a house or an apartment. Also, if you are looking to invest using margin or if you want to get a credit line, it is always a good idea to have a good credit score.
Also note, that having bad credit is not a crime and you should not be embarrassed, it’s better to understand what you owe and how to attack your debt, improving your credit score is really not that hard and it requires a few months of work, however the benefits are worth it! Take the time to learn how the credit ratings work, having low debt and a good credit score is one of the best investments that you can do for your personal finances.