There are things in life that we cannot buy outright. For example, most people cannot buy new cars, jewelries, or new home in one go. In order to have those things, one goes for getting credits by borrowing money from creditors or lenders. Therefore, to get that home, one takes a home loan; a car loan will make it possible for person to get his/her dream car.

Now, you are applying for a loan and lenders will evaluate you using the three-digit number called your credit score. What is a credit score? This is a three-digit number created by Fair Isaac that predicts the chances of failure in credit. The main factor affecting your score is your credit report. This report contains your credit history, everything about your credit transactions, loans and many more. The three credit bureaus (Equifax, Experian, and TransUnion) make use of this scoring system. These credit bureaus give the credit score and each of them gives different scores even if your credit reports are the same. Credit score can range from 200 as the lowest to 850 as the highest.

Therefore, lenders or creditors can predict if you are a high-risk borrower or not through your score. Aside from that, credit score affects the interest rates of your loans. In simple words, a high credit score entitles you to a premium loan with a very low interest rate whereas a poor credit score can give you a typical loan with a very high interest rate.

For a better understanding, picture out this example: you apply for a home loan and its application is pending. You have little time to increase your score. Do you know how to improve your credit score immediately? Your first step should be getting your credit score and credit report from all the credit bureaus. As you get your credit report, never forget to get as well confirmation number so that you can follow up items listed in the report. The score and report is accessible online. Since you are applying for a home loan, it is necessary to know you middle score. Let us say that your TransUnion have 590 score, Equifax is 623 and Experian is 635, your middle score will be 623 (this is your loan broker will tell you). 620 above are considered as a light to medium risk and you are entitled to loans having low or no income verification. Then your game plans should target the increase of your Equifax score. What you can do is start investigating all the times listed in the report though the phone or Internet. If you find negative items in the report, dispute it by saying that is not yours or you have already paid it. Show proof for a fast investigation. As you dispute negative items, Equifax will temporarily increase your score. By the way, the past 18 months in your credit history will really count in your credit score so try to dispute negative items at that time. For example, you have a two 30 day late payment in your MBNA Visa card in the 18-month duration; try to explain that you are in a terrible situation and your payment is delayed because of their pay-by-phone service. As they do internal investigation, they also delete derogatory items temporarily. If you do this, there is a possibility of a 20 to 50 point increase in your score. Therefore, dispute with persistent.