Are you trying to increase your credit score? Try cleaning up an old mess.
Any unpaid and uncollected money you owe from a long time ago could be hurting you now.
David had a small consulting business between 1995 and 1998.
His only staff member was a secretary.
In 1999, he closed his business and went to work as a partner in one of the large consulting firms.
He received a notice in 2000, that he owed $414 in payroll taxes for 1999, but he ignored it as he had not operated a business during that period.
That was a big mistake.
Seven years later, he went to refinance his house.
He was surprised when the mortgage officer told him he couldn't qualify for the banks rates.
After all, he always paid his bills on time.
So, David ordered his credit report to see what was the matter.
When he got it, the score was lower than he had anticipated.
A closer look revealed a government lien for $2600.
It was the payroll taxes plus interest.
When he contacted the payroll tax department to clear it up, they said the time for appeal had expired.
David had to pay the $2600 that he didn't really owe just to qualify for the loan.
If you've got any old, outstanding debts, you need to get them cleared up.
Taking care of delinquent debts will increase your credit score.
Get a copy of your credit report six months to a year before applying for any big loan such as a mortgage.
This will give you time to increase your credit score by cleaning up old messes.