It seems that hurting your credit is entirely too easy than it should be. Having your credit damaged can happen from a series of events and life happenings and it is important to know that it does NOT always mean you have been irresponsible or careless with your finances.
However, let’s admit it, sometimes that is the reason. Either way, here are a few tips on how to begin repairing your credit and building it back up to a respectable level.
If you don’t have one, get a credit card. Better yet, get two! However, be responsible! Use them for small purchases and then pay them off immediately. Do not spend money you don’t already have. Maintain the mind set you are BUILDING credit, not USING it. For example, use one card for exclusively gas purchases and use the other for food. Pay them both off once a week. Another benefit other than gradually building your credit again are the awards or points you can earn with your credit card. If you pay them off and never have to pay interest, it’s like getting free money in a sense. Just make sure to pay them off regularly, not just the minimum payment due.
Pay down your existing credit cards. To be brutally honest, credit bureaus don’t like to see a card have more than 30% of it’s credit availability used. So with your current cards, try your hardest to pay them off, if that’s a bit too much to take on right now, then at least get them to 30% balance or less. If you have multiple cards, start paying down the card with the balance closest to the credit limit on the card.
Make sure to check your credit report. Go over it and if you find any errors make sure you report and dispute them to the credit bureau and reporting agency. You will want to especially look for late payments that are incorrectly listed for any of your accounts. Also make sure that the amount that is said you owe is indeed the correct amount.
Now that we have gone over a few thing you SHOULD do, let’s quickly go over what you SHOULDN’T do. Do not ask a creditor to lower you credit limit, do NOT make a late payment and don’t apply for more credit if you already have plenty.
Many people find that when they need to buy a house, car, or another big item, it is important to know how to repair credit. There are many reasons that credit can need to be repaired. This can be because of late payments, not having enough credit or because of collections or judgements. The great thing about this is that it can be repaired with a bit of effort.
The first thing that needs to be done is to order your credit report. You can not begin to fix something that you know nothing about. A credit report can normally be obtained for free by contacting each of the three credit reporting agencies. Some of them offer one free report per year. Once receiving the report. Find the companies that you owe money to, or that you have late payments with.
Once you have a credit report, you need to call each company and see if they will work out a payment plan with you so that you can pay off any debt that you may have. Also, it is a good idea to start making on time payments on all the accounts that you have. Ask the credit agencies if they can report that you are making on time payments. This will help your credit score go up. Try to pay down any existing credit cards so that you only have used 30 percent of the limit. Carrying high balances on credit cards will make your credit score go down. Carrying low balances will make your credit score higher.
Establish lines of credit with companies that will report on time payments to the three major credit reporting agencies. Always make sure that you keep the balances low and always make the payments on time.
By following these steps on how to repair credit, you will be well on your way to having the credit to buy that new item. Always remember that credit card repair is a process that can take at least 6 months to a year to see good results. Be patient and continue to pay down debt and make on time payments.
How to Repair Credit History
If you find that your credit scores are below par then you’re not alone. In the past few years many are finding themselves unable to pay their bills, resorting to default and even bankruptcy. Statistics show that there are almost 50 million people with this problem. Before you do anything drastic know that there are ways that, with a little time and elbow grease, you can repair your credit scores.
To begin with you need to find out exactly where you stand concerning your credit scores and creditors. You’ll need to start by checking with the three main scoring companies, Experian, Equifax, and TransUnion. While it may seem odd to deal with three different companies it’s important that you do so. Many creditors will only report to one or two of them. Each one has a different criteria as to scoring and a different credit rating for you. A surprising fact is that creditors fail to report payments or you’ve mistakingly been docked for someone elses bad credit due to improper reporting by a creditor or one of the three credit report agencies. Sorting through your credit scores will be your first step.
Once you’ve sorted through your scores, you’ll need to make arrangements with your creditors to pay down your balances. In many cases debtors today are taking a percentage of what you owe due to the large amount of debts they are now processing. This is especially true with credit card companies. Do not cancel any credit card before paying it off. This will go against your credit rating in that it will show you still owe on a cancelled card. Scoring agencies consider this a cancellation by your credit card company and not by you. This will lower your rating.
If you find that you have too many creditors to pay separately it may be in your best interest to consolidate your debts into one payment. If you don’t wish to do it yourself there are credit counselors that will contact your creditors for you and arrange payments. Make sure the counselor you deal with is reputable. Maintain a good relationship with each creditor and keep continuous watch over your credit scores. Be sure that every step of the process is recorded to the three main scoring agencies by all creditors. In this way you’ll be able to repair your credit history without resorting to drastic measures.
With the high unemployment rate, huge number of foreclosures, and people not being able to pay their credit card bills, it is no wonder that many people have sustained significant damage to their credit rating. This does not mean that it is impossible to improve your credit, but you will have to take a few steps to repair credit history, so that when you are in need of financing in the future, you will be able to easily find financing that means your loan needs.
- A first step in repair credit history is to see exactly what your history says about you. Request a copy of your credit reports and make sure that you review it to make sure everything is accurate.
- If you find something that does not seem quite right, you do have the right to dispute it. Once you know exactly what your credit history says about you, you can take the next steps needed to improve your credit rating.
- One of the steps that you will need to do to start to improve your credit history is to being to pay all of your bills on time. When payments are made late on your accounts, your credit rating takes a huge hit, so it is vital to make all payments on time. In order to improve and repair credit history you will also need to lower the number of accounts that you have open.
- Limit yourself to only a few accounts and ask that the other accounts be closed out. If you have balances on all of your current accounts, see of your can consolidate them to your credit account that has the lowest interest rate.
If you have recently filed bankruptcy and are trying to repair your credit a great way to do so is to get a secured credit card so that you can start to reprove that you can be trusted again to use credit. You may also want to consider asking a family member to cosign a small loan for you, as a way to jumpstart your credit.
Completely repairing your credit history may take a few years, but by taking the correct steps you can slowly improve your credit rating monthly. Consider the aforementioned steps a great place to start on those repairs.
Credit Repair Company
No matter what the reason is that your credit is so damaged, from default on credit and unsecured debts, to a default on a personal loan or a car note, having a credit repair company help you get your credit back in line, is a great way for any debtor to revive their credit score. Choosing to use the services of a professional company, and employing the use of a credit repair company to assist you in starting the repayment process, is the best way for a debtor to get their bills paid, minimize their overall debt amount owed, and start raising their credit reports slowly but surely.
When you hire a credit repair company to assist you on the repayment of debts, they are going to wor with you, and the creditors you owe, in order to set up a repayment plan, in order for you to make the payments, in a reduced amount, and start paying of loans that you may be in default with. The services of a credit repair company are similar to a loan consolidation company. But, a credit repair company will not work to consolidate all of the loan amounts you owe, but rather, they will just do the negotiating work with each creditor, and try to set up the repayment plan with each individual creditor.
Most creditors are willing to work with these credit repair companys, rather than with a personal debtor, due to the fact that the credit repair company is aware of the way the financial world works, and knows that if a debtor defaults, or simply does not repay the money, there are only limited actions which the creditor can take from them. And, if the debtor were to file for bankruptcy, rather than hire a credit repair company, the creditors would not get any money at all once the bankruptcy went through. For this reason, creditors will work with the companies a debtor hires, so that they can at least get back a portion of the money owed to them, rather than get nothing at all. It is similar to a settlement, but does not work in the same manner legally.
So, if you are looking to rebuild your credit, and raise your credit score, you are going to want to hire a reliable credit repair company to help you work with creditors, and start on the repayment process.
How Do I Repair My Credit?
No one likes having bad credit. It can get you turned down for apartments, insurance or jobs. You will also pay higher interest rates on loans, if you can get them at all. With some time and effort, you can repair your credit. There are only three full proof methods to fixing your credit: have mistakes corrected, have the creditor make changes or wait for time to pass.
The Fair Credit Reporting Act governs how credit information is reported and used by companies. It also details procedures for disputing incorrect information and how long accounts remain on a credit report. Under this Act, you are guaranteed an annual copy of your credit report from each of the three major credit reporting agencies free of charge. Go to http://www.annualcreditreport.com for information on how to get your reports.
Once you have all three reports in hand verify that the information on them is correct. Any incorrect information should be disputed. Send a letter to each agency explaining the incorrect information. A sample dispute letter can be found on the Federal Trade Commission’s website at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm. Include copies of documents supporting your side of the dispute. The agency then has up to thirty days to investigate all disputed claims. Once their investigation is concluded, they will send confirmation of their findings.
- If the agency sides with you or is unable to verify the accuracy of the account, the report will be corrected and you can request an updated copy. If they side with the creditor, you still have the option of adding a short statement to your credit report explaining the situation.
- In some cases, you can negotiate with creditors for removal of bad reports. If you have an outstanding balance on an account, the creditor may be willing to remove the report if you pay the balance in full.
- If the report is accurate, you may have no alternative but to wait. Bad reports will fall off seven years and 180 days after they become delinquent. Exceptions to this rule include bankruptcies and taxes. Bankruptcies are reportable for 10 years and taxes are reportable for up to seven years after they are paid in full.
While you are working to fix errors on your credit report, start rebuilding good credit by paying your current bills on time. Timely payments have the greatest impact on your credit score and can go a long way to getting your credit back on track.
Free Credit Repair
There are plenty of companies out there that will advertise that they will complete free credit repair for you, but the truth is that these claims are normally just scams. There are many fraudulent companies that claim that they will completely clean up your credit report and recognizing them from the legit credit repair companies can be hard to do. Those companies that are offering free credit repair only complete it for free until there services are completed and then they will request payment.
The fact is that while there are some legit companies that offer credit repair, you can actually do your own free credit repair. The first step in this is to obtain a copy of your credit reports from all three major credit reporting agencies. Once you have the reports go over them with a fine tooth comb to ensure that you catch any inaccuracies. If you do notice any errors, you as a consumer do have a right to dispute the errors. You will also want to make sure that anything that should be off by now is off. Bankruptcies should be off of your report after 10 years and repossessions and charge-offs should be gone after 7 years.
After checking the accuracy of your credit report the next step in completing you own free credit repair is keep the accounts that you have current and make sure that you are never late on a payment. If you have any past due accounts, contact the company to arrange a way to bring them up to date. You also need to work to pay down the debt on accounts open and always start paying off the debt that has the highest interest rate on it. Do not open any new lines of credit during your period of credit clean up either as this may make it seem to creditors that you are desperate for credit.
Take your time and make sure that you clean your credit up properly. You didn’t trash your credit rating overnight and you need to remember that you are not going to be able to clean it up overnight. If you do choose to go with a company to repair your credit, make sure that you do your homework and are dealing with a reputable company. Regardless of how you clean up your report, make sure that it is completed so that when you need financing in the future you will have no problem getting it.
Credit Repair Help
If your credit is in need of a bit of repair then you need to take care of this before it’s too late. If you have a FICO credit score of 620 or lower this pertains to you. While the three major credit scoring agencies, TransUnion, Experian, and Equifax have different criteria for scoring it is essential that you maintain above the collective 620 mark.
Credit cards, or lack thereof, are the main concerns of low scoring. If you don’t have any sort of credit then it’s important that you get some. It may be advisable to have a low amount credit card and build credit from there once you are able. Showing that you are making regular payments on a card promotes good credit scores. If you have limited funds then it’s recommended you take out a secured card. A secured card means that the issuing bank gives you a credit line equal to your secured deposit with them.
If you find you have too much credit you may be having a hard time making payments. If this is the case you may want to consolidate into one payment plan, or make arrangemnts with your credit card companies to lower your payments until you can resume a regular rate. Another way to consolidate, maintain, and repair credit is through an installment loan. This will help consolidate your payments into one and actually improve your credit scores.
Under no circumstance should you cancel a credit card before paying it off. This may seem like a good way to stop any further charges, but in reality you are causing yourself more grief for a number of reasons. A credit card cancellation will show on you credit scores as a cancellation by the credit card company and not by you. This means it is implied that they forced cancellation. It won’t stopped your payments and skyrocketing interest. While you don’t have use of the card you still have accruing card debt.
Understanding how your FICO score works will also help if you need credit repair. FICO rates your: Payment history and revolving debt and, to a lesser extent, length of credit history, types of credit, and any recent searches for credit. However, the last item of recent credit searches may mean that you are still applying for credit elsewhere and is the worst thing you can do when trying to repair credit.
It’s not as hard as you think to repair credit
With the current state of the economy, having a great credit score is a rare commodity. You may have lost your job, your home, and your livelihood. If you’re like many people, your credit may have been hit the hardest. To get back on track, you will want to take the time to repair your credit.
If you want to repair credit, the most obvious way is to repay your creditors. To get started, make a list of those to whom you owe money, either in writing or on a spreadsheet on your computer. Include their name, contact information, your account number, and the amount you owe. Be sure to include any late fees. You can find this information on your most recent statement. If your account has been charged off, you can find the information on the documents you are receiving from the collection agency.
Once you have compiled all the information, you will want to decide how you are going to tackle repayment. Some suggest paying one company at a time so you can put all your money toward that debtor and pay it off quickly. Others recommend paying a set amount to each creditor. Still others recommend credit consolidation so you will only have one bill to pay each month. Which path you choose will depend on your current financial situation, how much you can afford to pay, as well as your goals for credit resolution.
If you are uncertain of how to proceed, you may want to consider contacting a financial opportunity center. The center can help you repair credit that is in a bad state. Many offer credit analysis, dispute resolution, budgeting skills, and some even offer financial education workshops. If you can find one through a non-profit agency, you may not have to pay for their services. Otherwise, there may be a small fee, but the result will be well worth it if you can use them to repair credit and get your life back on track.
Most importantly, don’t become discouraged. It may seem like it’s going to take a lifetime to repair credit that’s gone bad, but there is always hope. If you budget, set goals, and work hard to achieve them, you will arrive at a place of financial success.