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Five Steps to Credit Repair |
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Bad credit
can often prevent people from getting home loans, car loans and credit cards. And even people fortunate enough to secure a loan with bad credit scores often pay much higher interest ad fees. Where some choose to deal with their credit report problems by ignoring them, others take the initiative to work towards credit repair and often find that their fears were largely unfounded.
By taking an aggressive approach to credit repair, people with severely bad credit can still see their credit score rise significantly in only a year or two. Stop the bleeding Before starting your credit repair crusade, try to harness your own spending and use of credit so that you don't get into more financial trouble. If you can't break old habits, there is no chance for a new start. Don't necessarily close your credit card accounts, but try to stop using them and begin paying down on the balances. Your goal is to improve your credit score and an upward trend of on time payments will go a long way to doing this. On time means never being 30 days late. At fifteen days you may pay a late fee, but late items must hit 30 days overdue before they will be reported. Determine where you stand While it probably won't be much fun, determining where you stand with regard to your credit rating is a huge step forward on the road to recovery. While finding the truth is sometimes painful, especially if you have income worries, it will help you measure your success. After all, if you don't know what needs to be fixed, it will undoubtedly remain broken. Develop a plan of action Aside from paying all of your bills and credit installments on time (right?) you will want to begin slashing your spending, working out a repayment schedule with debtors, repairing negative or erroneous items on your credit report, and getting your balances down so that your credit improves over time. Communicate with creditors Nearly all creditors will be happy to renegotiate terms if you're having trouble paying bills. Utility companies, medical organizations, and even some credit card companies are good candidates for freeing up some breathing room. Simply inform them of your problem and request a reduced payment schedule. Of utmost importance is that you stick to the new payment schedule once they agree to do it. Dump the negatives and accentuate the positives If your credit report has errors on it (very common) then you'll want to contest these negative items to try to have them removed. In addition, if they have omitted some positive aspects of your credit history then you will want to try to add this information to your report. While creditors are not required to report information to the credit bureaus, you are entitled to add information that you feel will help your credit score. According to law, you are allowed to write a letter (up to 100 words) involving any dispute with your credit report. The agency must then investigate your claim and work in your favor if the dispute can't be proven. When writing about positive items that aren't appearing, mention active accounts where you have good standing, salary increases, and information about your on time loans (i.e. mortgage, car loan, etc.). If you need assistance with credit repair, we have amassed a number of proven firms that can help you get on the road to financial rebuilding and credit repair. |
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