Are you looking to repair your credit report and raise your credit score? Credit repair is not as intimidating as it might seem. With some diligence and patience as you apply the tips that follow, you can have your credit report cleaned up, and raise your credit score higher than you thought possible.
Before doing anything, sit down and make a plan of how you are going to rebuild your credit and keep yourself from getting in trouble again. Consider taking a financial management class at your local college. Having a plan in place will give you a concrete place to go to figure out what to do next.
Refrain from applying for too many credit cards. When you own too many cards, you may find it difficult to keep track of them. You also run the risk of overspending. Small charges on every card can add up to a big liability by the end of the month. You really only need a couple of credit cards, from major issuers, for most purchases.
If you have challenged or denied negative items on your credit report and some still remain, you may be able to reduce that number even further by contacting the collection agency or creditor. By law, these companies need to provide written proof that the account is yours. This means a hard copy of a signed contract or other legally binding document, not just a printout of the information they have in their computer system. Many of these companies do not hold onto these documents. If they can’t come up with acceptable proof, they are required to remove the account from your credit report and stop all collection attempts.
To build up a good credit score, keep your oldest credit card active. Having a payment history that goes back a few years will definitely improve your score. Work with this institution to establish a good interest rate. Apply for new cards if you need to, but make sure you keep using your oldest card.
By paying your debt and bills on time, you show your creditors that you can be trusted. They will raise your credit limits accordingly, which has a good effect on your credit report. This also allows you to manage your finances much more comfortably than with a low credit limit.
Do not add on additional debt if you are working on repairing your credit. Opening a new account when you have missed payments and late accounts on file sends up a red flag to possible lenders. Fix the credit problems you have before opening up any new credit cards.
An important tip to consider when working to repair your credit is to pay your bills on time. This is one of the most important steps for maintaining good credit and preventing your score from dropping. Bad marks for past due accounts will stay on your account for five to seven years.
Do not get mixed up in things that may lead you to imprisonment. Sites may act like you can create new credit lines and tell you how to do it. It’s illegal to do this and you can get caught easily. You may end up in jail if you are not careful.
If you are trying to repair or increase your credit score, then pay attention to all of your credit cards. Many lenders are unexpectedly lowering the limits on many of their cards. A lowered limit will result in a sudden jump in the percentage of your credit that you are using, which will have a significant negative effect on your credit score.
When attempting to repair your credit, you should become knowledgeable about secured loans. An asset is usually tied to a secured loan. Your mortgage is a secured loan, and your lender may foreclose on your home if you cannot make payments. If you have missed some mortgage payments, it is wise to contact your lender to avoid the nightmare of foreclosure. If they believe your situation is temporary and that you are acting in good faith, many lenders will be willing to work with you.
If your credit is out of control, and you have made the choice to hire a credit counselors, make sure you are hiring a reputable one. Credit counselors should have certifications and be specifically trained in the fields of debt and money management, budgeting, and consumer credit. Ask for their credentials before you hire them.
Don’t use all of the credit available to you. Credit agencies use a debt to available credit ratio when calculating FICO scores. When debt is at a high percentage, the credit score is lowered. Keeping available credit on every account that you have will not only help your score, but will also give you some options should there be a costly emergency.
You can help repair your credit by making sure all your bills are paid on time, even payments on accounts in collections. When a potential creditor looks at your credit report, it looks a whole lot better to see that you are keeping payments up in good faith!
There you have it. Anyone who isn’t afraid of a little hard work can repair their own credit report, raise their credit score and be on the way to using their new, well established credit in a more responsible way. No time is better than the present to get started on repairing your credit.