Credit Repair

Nowadays importance of a good credit score cannot be overlooked. A good credit score can help you secure home loan at good interest rates, leasing a home and you might even need a good credit score before potential employers would offer you a job.

But what if your credit history stinks? Well you do not have to be disappointed, if you do not have a good credit score. The good news is that you can fix your credit score with some simple steps like following and continue monitoring it to avoid any dips in the score anymore.

Chalk out a monthly budget for your spending: Track your expenditure for 30 days and you will be aware of your spending pattern. According to your spending pattern you will be able to draw a reasonable budget for yourself. Being conscious of where you are spending your credit the most, will not just help you in your credit repair endeavors but also help you monitor it thereafter.

Procure your credit report: Before you start to fix your credit score, you need to have a detailed credit report of yours. You can procure your free credit report from the three credit bureaus (Trans Union, Equifax and Exprian) each year. You can also get your credit report from your respective credit bureau also, but for a fee. It is a good idea to get your credit report from all the three credit bureaus as that would make sure you are not missing on any information.

• Once you get your credit report, inspect it for accuracy and aspects that you need to improve in order to fix credit.
• Check your report for any such information that is not yours or you something that was by mistake reported as a delayed payment or underpayment
• Take stock of details such as unpaid payments or dues that have been sent to collection agencies.
• Credit accounts whose credit limits have been exhausted.

Any such information in your credit report that you do not agree with can be disputed. Go through the guidelines mentioned by the credit bureaus about disputing credit information and follow it to register your disagreement over the wrong information or inconsistencies in your credit report.

Now that you are ready to start your credit repair following tips would be a great help:

Get in touch with your creditors proactively: If you know that you will not be able to make due payments on time, get in touch with your creditors proactively. Explain them your situation. Believe me, they would rather work with you to schedule smaller monthly installments than to have collection agencies banging your door or have you file bankruptcy. If you are able to negotiate an affordable term for your monthly installments make sure you have it in writing. It is to safeguard you against any inconsistency arising in future between you and the creditor regarding the revised payment plan. Once you are finished paying you debt, make sure to send a copy of settlement letter to your credit bureau so that it can go in your credit report.

Pay up your debts: Paying up on time is one of the most important steps towards your credit fix. Once you have negotiated terms of payments stick to your monthly payments, do not falter. If your creditors did not agree to revise your payment installments then pay up at least the minimum due for each creditor. Any future payments that accrue try to be on time for them.

Lessen the number of cards you hold: Reduce the number of credit cards you hold. If you have to keep the credit cards then continue paying at least the minimum balance. Also while cutting down your credit cards, start from the latest one. Preferably keep the oldest credit card you have. Length of your credit history goes a long way in your effort towards credit repair.

Do not close all the credit accounts in one go: Closing all the accounts at once will affect your credit report adversely. Close your accounts gradually.

Secured Credit card: A secured credit card is where you have to show collateral to the bank before getting one. As you are required to pay money upfront and there is no risk of faltering, it will help your repair credit and build up your history.

Try to avoid bankruptcy: This is a very hard blow to your credit report. It reflects for ten years on your credit history so if you are out to repair credit then avoid bankruptcy is important even if you are in financially fragile situation and first impulse is to file bankruptcy in order to avoid any hardship.