It pays to pay on time.
The No. 1 way to raise your credit score? Pay all of your obligations on time. Your payment history constitutes 35% of your credit score.
That includes library fines and parking tickets. Municipalities have become increasingly aggressive about turning over delinquent accounts to collection agencies, which will drag down your score. One late payment reported to a credit bureau can drop your score by 100 points, particularly if you had a high score.
Late payments can remain on your credit report for seven years. Bankruptcies appear for 10 years.
If you find an error in your credit report, ask the creditor to correct it, then notify the credit bureau by sending a certified letter and copies of documents that support your claim. If the error isn’t fixed, the bureau must identify the person who investigated your claim, and you can request a second report.
If the error is corrected, the bureau must send you a copy of your new report and, at your request, a copy to everyone who obtained your credit report within the previous six months. If it’s not corrected, you can include a statement in your credit report.
Faced with a faulty credit report when you’re about to obtain a mortgage? Mortgage companies can engage a rapid re-scoring service to correct errors within days.