First Steps To Fixing Your Credit Report And Improving Your Financial Future

By Deborah Glenn

People from all walks of life undergo the effects of negative credit. The current slump of the economy has only compounded the problem. It is much more troubling to function financially when you have negative credit. While it is almost impossible to borrow cash if you have negative credit there are also other complications such as being charged higher deposits, interest rates and so forth. It is just more expensive all-around when you have bad credit.

Given enough time your bad credit can repair itself. Most listings will only stay on a report for 7 years. However, many people need results sooner than that so a practical approach is required. There are some actions you can take to fix your credit and begin working towards regaining your good credit.

First off you should know precisely what you are up against so the first step is to get a credit report from all of the three most important credit-reporting agencies, TransUnion, Equifax and Experian. You are entitled to obtain one free credit report from each organization one time per year as per the Fair Credit Reporting Act. You can also obtain a report that contains all three companies reports in one, however that one will cost you a fee.

Once you obtain your credit report, scrutinize it carefully for mistakes, errors or any kind of incongruity. The Fair Credit Reporting Act was enacted back in'70 to defend consumers from inexact and unjust reporting. It gives you the right to dispute anything on your report that is not absolutely accurate. This is critical because it has been estimated that as many as 75% or even more of all reports contain mistakes.

After acknowledgment of your dispute the credit bureaus have 30 days to validate the precision of their information or they must erase it from your credit report completely. It has been reported that 40% of all disputes end up by having credit report listings deleted. However, you may not succeed with your first attempt and the trick may be to keep trying. If your first letter does not go well, send out one more letter and an additional letter and so one until you do succeed.

Another critical thing to do is to endeavor to establish some new credit. If you are not able to get credit through the conventional measures then you can get a secured credit card or a secured bank note. With these you are generally requested to put a precise amount of money into an account for security and then you are given credit for that sum. With the exception of the security deposit the credit works precisely the same. You make your payments you get good information on your credit. You need only keep an account like this for about 6 months in order to make a big difference on your report.

You can also work at paying down debt or getting your credit limit raised in order to improve your debt to credit ratio. Be careful about paying off old debts or charge-offs as credit is reported based upon the date of last activity and if you pay it off all you are really doing is bringing the bad credit forward in time to begin the 7 year period over again.

Credit repair can be accomplished on your own and it is not necessary to get professional assistance. However, you may find that it is beneficial to get some professional expertise in order to get your credit fixed in a timely manner as it can be very time-consuming and you do need some knowledge and expertise. It may be worth looking at the services of a professional credit repair service. - 31382

About the Author:

Sign Up for our Free Newsletter

Enter email address here