Chris Rutherford asked:




Your credit score has a big impact on everyday financial situations such as: What interest rate you pay on a credit card, whether you can rent an apartment, whether you have to pay a deposit with your utility company, whether you can qualify for a home loan, and maybe even a potential employer’s decision to hire you. Going through life with bad credit can be very challenging.

Getting a Copy of Your Credit Report

You can’t fix bad credit without knowing what’s in your credit report first. You need to get a copy of your credit report from all 3 credit bureaus: Experian, Trans Union, and Equifax. You can request a copy of your own credit report for free once a year.

Reviewing Your Credit Report

It may not be fun, but reviewing your credit report line by line at least once a year is very important to identify any errors or issues that you may not be aware of. Pay special attention to “derogatory” (or negative) items such as late payments, collections, and charge-offs – they lower your credit score, sometimes significantly.

First, make sure your name, birth date, and current address are showing correctly on the report (in the “Personal Information” section). If not, make a note to correct them with the credit bureau(s). Make sure you check every account listed on your credit report:

Verify the account status is correct – you may discover old accounts you thought were closed that still show up as “open”. If you have accounts left open that you’re not aware of, they may be hurting your ability to apply for new credit or raise the credit limit on accounts you are using. Look at each account in detail (account number, credit limit, date opened etc.) and make sure it is really YOUR account. Someone else could have a similar name and their account might be mixed up with yours. Or worse, someone may be stealing your identity to open accounts in your name, leaving you with the unpaid bills. If you recently refinanced and/or paid off a mortgage or credit card account, check to make sure the account status (“paid, closed”) and current balance ($0) are reflected in the credit report. Note that there will be some delay (30-60 days) in updating your report.

Too many inquiries (requests for your credit history made by other people) can hurt your credit score. Review the “Inquiries” section in your credit report and make sure you know who asked for your credit file and why. You should either already have an account with the inquiring entity, or have authorized their credit check in some way (e.g. by applying for a new bank / credit card account or loan).

Understanding Your Rights

Remember, you have the legal right to know what’s in your credit file, and you have the right to dispute incomplete or inaccurate information. By law, the credit reporting agencies must correct or delete inaccurate, outdated, incomplete, or unverifiable information from your credit history, usually within 30 days.

Therefore, reviewing your credit report at least annually is critical to maintain the accuracy of your credit information. You can raise your credit score by disputing any errors or outdated negative information (more than 7 years old, or bankruptcies more than 10 years old).

Rosa

Mary Wise asked:




When trying to repair bad credit, you can either try and repair credit by yourself or use the services of a credit repair company that specializes in helping people repair bad or damaged credit if you don’t feel comfortable doing it on your own.
Either way, you can boost your overall credit score and start rebuilding your credit.

Credit Repair Companies

If you want to repair your bad credit legally and effectively, there are many methods you can utilize. You’ll find a lot of information about them on the net but beware that not all of them are simple and improper usage may lead to further credit difficulties.
While some credit repair options involve dealing with financial institutions, others are simple things you can change in your lifestyle to strengthen your financial position.
These are many reputable credit repair companies dedicated to helping you repair bad or damaged credit. The offers range from basic services that help and guide you along the way to all-inclusive credit repair services where they take control over your finances and work on your behalf.
Credit repair companies can often work much faster and more efficiently than you could on your own.

Concentrate On Your Credit Report

Trying to repair bad or damaged credit always should begin with your credit report. This is the tool used by lenders to determine your creditworthiness so it makes sense to ensure that its as pristine as possible. The key is making sure that your credit report is accurate. Check your personal information, the dates and amounts of debts listed, and your payment history to make sure they are correct. If you find any inaccuracy, act immediately.

Errors on your credit report can mean the difference between a high or low interest rate so if you find any inaccuracies, it’s critical that you act quickly. While a credit repair company can often do so faster and more effectively, here are a few steps you can take to repair bad credit errors.

Contact the reporting credit agency and clearly present your case in writing with any supporting proof. Credit reporting agencies are required to investigate the validity of your complain and remove the bad mark if they can’t substantiate it. Stay on top of this and continue to contact them if you get no positive answer.

Always be polite and professional so that they are more willing to work with you and take your challenge seriously. If you come across as just throwing darts hoping something sticks, you may be ignored. Correct negative information will stay on your report. There is no legal way of removing it and other means may imply fraud and legal problems.

Try To Consolidate Your Debts

If you are able to combine your debts or installment payments into one lower payment, you can effectively reduce your interest and your overall payments. This will free up what once was wasted money and help set the stage for repairing your bad or damaged credit by accelerating payments.

Kathleen

Chris Kennelly asked:




Unfortunately many of us have gotten used to the lifestyle that is almost dictated by debt, credit cards and loans; sometimes leading to a vicious circle of borrowing from Peter to Paul, as the saying goes. In the event that you have declared bankruptcy, and you are now beginning your process of credit repair, if nothing else consider the lessons that you could have learned from the process that led you to eventually declare bankruptcy.

Don’t fall into the same traps that you originally fell into, in terms of the credit cards, loans and so forth. These instruments are easy to come by and the companies that offer them are obviously there to turn a profit, regardless of whether or not you or other customers can afford to make the repayments or not. They will attempt to offer the greatest rates and best services to entice you into making more debt and getting back into a situation you previously found yourself in, before your credit repair efforts.

Strict discipline, commitment and motivation are all part of the required mindset of your credit repair efforts, as this will not occur overnight, but will take time and patience to get to your goals of cleaning up your credit name. If you have any accounts outstanding, then strict management in terms of repayments must be adhered to, even if it means that you forego some or other luxury item to meet your scheduled account payments. This will surely help you in not getting back into bad habits of late account payments which could well have led to the bankruptcy option.

You will further encounter the fact that due to your credit record being somewhat tarnished, that many lenders will offer you a loan but with a higher interest rate, due to the inherent risk that you pose for these financiers. You should by no means take this personally, after all these people are running a business. A better option for you may be to elect for a secured loan, whereby some sort of security is ceded to the bank or lending institution, which in turn offsets the risk, and they may consider reducing the interest rate.

If you can avoid any of the lending practices during your credit repair and even after that, then this would be ideal. Although as many of us are aware it is not that easy, especially with the rising cost of living, and once you become accustomed to a certain standard of living its difficult to change.

Leroy

John G asked:


Do credit repair companies work? I want to build or buy a house for my family .This is no joke , I have seven kids . So it’s very important that I get a good P.M.I. and a good interest rate or I’ll never be able to afford it. I make about 60k a year , but one of kids had to have 5 brain surgeries right after she was born and this ruined my wife and my credit . Any suggestions would be appreciated. Please , serious stuff only.

Antonio