Credit repair: How can you repair your bad credit history?
Good credit is so important to you. Your credit report is the tool that lenders use to determine if you are capable of repaying loans. Some people use credit experts to repair their credit and other try to repair their credit on their own. Today’s economy has credited the need for some to repair their own credit. Repairing your credit can be a lot easier than you think. All you need is the advice of professional credit experts. You can apply these tips to your personal credit situation so that you can get out of debt quickly.
Simple Steps to Repair Damaged Credit
- Order your free credit reports. It is very important to know what each of the three credit agencies are reporting on your credit reports. You may not believe this but each of your credit reports can have very different information about your payment history. Lenders depend on the credit agencies (Experian, Equifax, and TransUnion) to report your payment history for their loans. When credit agencies do not report this information accurately, you may suffer. Your credit scores may vary, and this situation may prevent you from getting credit.
- Dispute any inaccuracies. First, order your free credit report from annualcreditreport.com. The best way to repair your credit when you receive your credit reports is to contact the lenders in writing. You can dispute anything on your credit that you do not think is accurate. Inaccuracies are common, and they should not go unnoticed. It may take several times of contacting the credit agencies before the problem is resolved. You should not expect and overnight miracle. They usually get back to you within 30 days with their findings in regards to the dispute. You can continue to dispute inaccuracies until you feel that the problem is resolved.
- Document all contacts with credit agencies. The dispute process can be very lengthy for you. Make sure that you make copies of any letters, phone contacts, etc. that relate to your disputes. Your information may pass through the hands of many people before the dispute is resolved. Write down the names, dates, and times that you speak to agents in regards to your credit issues. Once a negative item is removed from your credit report, they will contact you with the findings. They also will provide you with a copy of an updated credit report that reflects the changes. The information cannot be put back on your credit unless a creditor verifies that the removed item is accurate. They are required by law to send you written notice when this happens.
- Keep your account balances low. Even if you pay all of your bills on time, your credit can still suffer. Take your credit cards for example. They have a certain line of credit that the lenders give you. Did you know that balanced over 50% of the available limit may harm your credit score? Lenders may see your high balances as a red flag when it comes to lending you money. Try to keep your balances under 25% on each of your credit cards to keep your credit score intact.
- Make sure you take care of judgments on your credit. Judgments can create a 7-year problem for you. Try to take care of any judgments before you tackle the rest of your credit report. Defaulting on loans may be a sign that you will not pay back future loans. Try to rebuild your credit by paying your other bills on time until the judgment falls off your credit report.
- Do not default on student loans. Defaulting on student loans can be a huge mistake. Your wages and income tax may be garnished, and negative notations may appear on your credit until the loan is out of default. It is best to make payment arrangements with the lender so that your account can reflect a status of being current.
- Make sure your accounts are current. When accounts are 30 to 60 days late, lenders may report this information to credit agencies. Late payments lower your credit score, and they may prevent future lenders from offering you loans. Also, you should try to negotiate charge offs and collection accounts that are currently on your credit report.
There are a few easy steps that consumers can use to repair their credit. Lenders are willing to negotiate payments and remove items from your credit report if you are consistent with your requests. Good credit history provides the foundation that you need to maintain you creditworthiness.