Determining your score
 
To improve the credit score so that you have the best possible terms on a home equity loan, the first step is to learn all you can about the items recorded on your credit reports. There are three major credit bureaus and each of them may have different information. Some or all of the credit bureau reports can contain errors that should be corrected. There are precise procedures that must be followed in order to clear inaccurate, duplicated or missing information.   It is possible to complete the cleanup process yourself, or there are companies that specialize in clearing up the information.
 
What role do credit bureaus play?
 
Credit bureaus collect information about individuals and present it in a consistent form to lenders, promotional businesses and landlords among others, in order to demonstrate the creditworthiness of the individual. When an individual applies to a lender for a home equity loan, the credit report of the potential borrower will be requested from one or more of the credit bureaus. Usually, the report is presented in the form of a FICO score. This score is a numerical value that tells the lender how the borrower ranks according to the bureau’s algorithm.  
 
Improving the score
 
Before applying for a home equity loan, you should review your credit score and take steps to improve the score. First, call for a current credit report from each of the three major credit bureaus. Each is required to provide a free report each year upon request. Then carefully review each item and make certain that you understand what the terms and markings indicate. Take note of each incorrect item and follow the instructions provided by the credit bureau to dispute the incorrect information. You should document each step of the process and don’t give up until the report is as accurate as it should be.
 
Removing negative entries
 
Current legislation provides a number of different ways that consumers can force the credit bureaus to remove inaccurate information. You can also stop the sale of your credit bureau information to companies who purchase such information either to try to collect on old and sometimes nonexistent debts. Negative entries will lessen the chances of good terms for the home equity loan for which you apply. For example, too many inquiries will lower your credit score. A history of frequent moves can hurt your chances. You can lose good terms on a loan because you’ve held too many jobs recently.
 
Fixes to avoid
 
Adjusting the credit score can be fairly simple to do, so it is not necessary to pay someone else to correct your credit score. In fact, some less than scrupulous businesses take your money, but don’t do much toward correcting errors. Don’t waste your money on one of these. You should also avoid blanket disputes online or by mail. The credit bureau will often consider such efforts frivolous and refuse to investigate the dispute further. The time you spend in correcting legitimate errors will pay off in reduced terms for your home equity loan.