Credit Repair: Rebuilding a Good Credit is Important

With our life increasingly dependent on credit and debt, having a good credit rating is essential these days. If you have bad credit, you may find it difficult to get credit or do things that require a good credit history. Even if you can get credit, you may be asked to pay higher-than-average rates and fees on mortgages, loans and credit cards.

Damaged credit can be the result of late payments on your credit cards, loans you never paid back, delinquent child support, tax liens, court judgments against you or bankruptcy.

Negative information remains on your credit report for seven to 10 years. However, It is never too late to clean up your credit or start to build a credit history. Once your credit record is on track, you will have access to the financial safety net that good credit provides.

Examine Items On Your Credit Report

The first step in repairing your credit is knowing exactly what your credit report says. Credit reports are compiled by one or all of the companies that supply credit reports - known as credit reporting bureaus.

Every consumer should regularly review his or her credit reports from each of the three major credit bureaus: Equifax, Experian, and TransUnion. It is a good idea to order copies of your credit report from all three of the largest companies at least once a year.

Correct Any Mistakes On Yuur Credit Report

It's a known fact that a significant number of credit reports contain errors, so it would be important how to correct them. The responsibility of the credit bureaus is to correct an error you have discovered in your credit report, but only after you have contacted them with the correct information. That's why it's so important to check your credit report on a regular basis.

You can legally dispute any inaccurate and outdated information on your credit report. Write the credit bureaus a letter requesting that they remove the information in question.

If you contest the completeness or accuracy of information contained in your credit report, you should file a dispute with the credit reporting agency and with the company that furnished the information to the credit bureau. Both the credit bureau and the furnisher of the information are legally obligated to reinvestigate your dispute. By law they have 30 days to investigate. If they can't prove that it is true, they must remove it from your credit report.

Avoid Common Problems Leading To Bad Credit

To keep your credit history looking good, get to know some of the red flags that trigger lender disapproval:

  • High balances
  • Too many applications
  • Low credit score

Add positive information on your credit report

You need to work to add positive information and show stability in your credit report, like making payments on time and having no late payments.

  • Keep your existing credit accounts in good standing.
  • Get a secured credit card
  • Make small amout purchases and make payments on time every month.

Reduce Debt

Unpaid debts are among the most damaging items on your credit report. Make every effort to pay outstanding bills. Start by deciding on a realistic payment schedule - most lenders and collection agencies will work with you to set up a reasonable payment plan.

If you are overwhelmed by your debts, contact your local Consumer Credit Counseling Service.

If you need professional help, you may contact credit repair firms.

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