In a 2004 survey conducted by PIRG (the Public Interest Research Group), 1 in 4 credit reports were found to have errors serious enough to hurt an applicant's access to loans and jobs. A bill which was introduced last month in the US house could ban employers from using credit report information against potential employees. Until it passes, however, job seekers should hit their credit report before pounding the pavement.
Ask Creditors For a Break
Making late payments on credit card, mortgage, and car loan payments is a surefire way to make a credit score plummet. Always pay on time. Loan holders who are short on cash should call their lender and ask for an extension or permission make a smaller payment. This is a one-time maneuver to prevent a late payment from hurting the credit rating and should be used for emergencies only.
Limit Credit Cards
To protect a good credit score (or prevent a bad one from getting worse) never apply for more than two cards at the same time. To credit reporting agencies, someone with multiple open applications for credit looks desperate for cash and desperate people are not good credit risks. Multiple credit card applications also could look like the applicant's identity was stolen, and ID theft will cause a credit score to plunge.
Shred Credit Card, Bank and Other Financial Statements
Stolen identity will quickly ruin credit. Don't throw junk mail away, shred it. Shred bank statements, credit card bills, and anything with personal financial information or a social security number on it. Shreds can be safely recycled because thieves take the easy route and look for statements ripped in half which can be easily re-assembled; they don't bother with shreds.
Don't be Late on Credit Card Payments
When a credit card holder misses a payment deadline their other lenders can jack up their rates as well. This clause is called “universal default” and it should be avoided it at all costs. Check the fine print on credit card statements and review their late payment policies and consequences.
Check Credit Card Statements Online
Credit card statements should be checked religiously and regularly scanned for illegal activity. When a fraudulent charge is caught and dealt with quickly it reduces the overall damage to the victim's credit rating and their overall liability for fraudulent charges.
Don't Use a Post Office Box
Using a post office box can harm a credit rating. When credit rating agencies see a PO box in an address they worry that the holder has lost their home or someone has stolen their identity: two things that adversely affect credit scores.
Get Your Free Online Credit Report and Correct Any Errors
One in four credit reports have errors. Get a (free) credit report once a year from and dispute inaccurate information and look for signs of identity theft. Inaccurate information can substantially reduce a credit rating, so be vigilant.
Update Credit Reports with Positive Information
The more positive credit history there is on a credit report, the better. Get copies of positive account histories from loans (and other regular payments not listed on the credit report) and send them, along with copies of canceled checks, to Experian, Equifax, and Transunion, the three major credit reporting agenices. Ask credit reporting agencies to add info to their file. While not required to do so they often do (but may charge a fee for this service).
To check the Equal Employment for All Act bill's current status, track it at the govtrack.us website.
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