Do you want to buy a house, a car or other expensive goods? You will probably look for finance, but a lender will look up your credit report and score. Credit score measures your ability to pay the amount you owe.

If you maintain a good score then you will be offered bigger amount of loans with lower interest rates. It goes in the wrong way if credit report shows unhealthiness. Varieties of credit score available to the lenders, among them FICO scores are most reliable and widely used. Lenders get the report from major credit bureaus like Equifax, Experian and TransUnion.

If you are going to apply for a loan with bigger amount then you should take a copy of your FICO score from these bureaus and review it properly. This action should be taken at least 3 to 6 months before you apply for a loan because this time span will give you a chance to improve your standing before a lender.

  • How to improve your credit report and score?

Many steps can be taken for the improvement of credit report and credit score but among them below mentioned five points can be handful:

  • Correct mistakes in credit report;
  • Pay bills on time;
  • Pay off debt;
  • Reduce credit card balances;
  • Don’t open and close credit card accounts near loan time;

1) Correct mistakes in Credit Report: Credit score depends on your credit report. To get good score you should have better credit report. For accuracy, review your report from all three major bureaus at least once in a year but when you have a plan to apply for a loan then check it in quick times. Some times credit report shows several mistakes like timely paid bills labeled as lately paid which leads to a bad score. To rectify this error it may takes 30 to 90 days and sometimes longer. Find the sample dispute letter below:

Sample Dispute Letter

Your Name
Your Address
Your City, State, Zip CodeComplaint Department
Name of Company
, State, Zip CodeDear Sir or Madam:I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.Sincerely,
Your name

Enclosures: (List what you are enclosing)

It is in:

2) Pay bills on time: This practice is always good. You don’t have to worry too much if you pay your bills on time. Remember one thing, never be late or miss a payment before applying for a loan. The reason is that a recent late payment hurts the credit scores adversely than five years back late payments.

3) Pay off debt: It is always better to pay off debt rather than moving it around with other credit cards. The ratio of credit card balance to credit limit is the key to judge your credit potential. Transferring balance and closing out an account means the increment of the ratio which will lower the score.

4) Reduce credit card balance: Your FICO score is heavily depends on the factor of how much money you owe on your credit card relative to your total credit limit. It is always better to keep the balance below 25 percent of the total credit limit which helps to improve score.

5) Don’t open and close credit card accounts near loan time: You should not open credit card accounts which you don’t need as well as don’t close accounts. Only using few among several credit card accounts will raise the balance-to-limit ratio if you close unused account. Opening a new account will also raise the ratio if you have short credit history because a new account will lower the average age of your accounts.

  • Where to get credit report from?

FCRA requires the three nationwide consumer reporting companies (Equifax, Experian and TransUnion) to provide people free copy of credit report once every 12 months.

  • How to order for free credit report?

The three major credit reporting companies have set up their website, toll free phone number and mailing address through which annual report can be ordered.

Contact Info of Equifax, Experian and TransUnion:




Equifax (

P.O. Box 740241
Atlanta, GA 30374


Experian (

P.O. Box 2002
Allen, TX 75013

1 888 397 3742

TransUnion (

P.O. Box 1000
Chester, PA 19022