How to Repair Your Own Credit
A
credit score is important because it determines your ability to
borrow funds. Unfortunately, for some, your credit score may have
gone done due to unavoidable circumstances. Worry not because you can
still repair your own credits, improve your score consequently better
your ability to get loans from creditors on affordable terms.
Remember that improved credit score opens opportunities to qualify
for lower costing interest rate loans and better borrowing terms.
However,
credit repair is more like enhancing your professional
network. You may not think of it until you need it and that would
really inconvenience you because it’s not something you can repair
overnight. So, if you have a bad credit score, you need to start its
repair now so that you can have an easier time when you really need
it.
Why
You Need to Repair Your Credit
You
need to pursue credit repair because it is vital when looking
for loans, credit cards, and saving money on insurance. It's also
critical when you are looking for a good job. A good credit score
will avail you new employment opportunities, promotions at your
workplace, and earn you raises in your salary with your current
employer. Moreover, if you plan to start a business or want to be
sure that you can get a loan when you need it then you have no option
but repairing your credit.
It
is not difficult to repair it and you simply need to follow the steps
that I will explain in the following paragraphs:
Evaluate
your credit score reports:
The
first step is to evaluate your credit score reports. There are
certified credit bureaus which can give you one free copy of your
report annually. You only need to request them to send your latest
credit report. The report will give you an overview of all the past
mistakes that have led to your poor credit rating. Read it keenly and
note all the negative things that have affected your credit score.
Review Report for any Errors:
Secondly,
review the credit reports for any errors. You can see all items that
have been listed in the public record; detailed information on every
account you hold; and inquiries made to your credit report.
Next,
decide on data that needs repair. These include incorrect
information, for example, all accounts that you don’t own, payments
that have been reported incorrectly late. Also, check past accounts
that are charged-off, late or have been sent to a collection agency.
You
can then use a different color of a highlighter to mark each type of
information to do your work easy when planning for repair. This makes
it easy even in the future when ready to call creditors, make a
payment or send a letter.
Dispute
any Errors:
The
third step is to dispute credit report errors. It's your right to
dispute any inaccurate information in your credit score and others
that are not verifiable or incomplete. When you get your credit
reports from the bureau, you will get information on how to send your
disputes. You can equally do it online, make the disputes through the
mail or phone call. The best method for sending disputes is regular
mail because it offers enough benefits. First, you can attach a
document to support your disputes, and you can keep a copy of your
dispute letter for fire use. Additionally, sending a dispute via
regular mail with return receipt request, you will have proof of the
time you mailed. This is essential because credit bureaus take 30 to
45 days to investigate then respond to your complaints.
When
you send your disputes include a copy of your credit report with
highlighted items that you are complaining about. Then ensure you
attach a copy of any proof supporting the dispute. Failing to send
enough information can make the credit bureaus dispute it terming it
frivolous. Consequently, they will refuse to investigate your dispute
or updating your credit score report. Alternatively, you can send the
disputes directly to the bank or company that listed the data on the
credit report. They are legally obliged to investigate any dispute
then delete incomplete, inaccurate and unverifiable information from
the report.
After
a successful dispute, the bureau updates your credit report, alert
other credit bureaus then send you a copy of your updated credit
report.
Handle
past due Accounts
The
next step is to tackle your past due accounts. Have in your mind that
your payment history greatly affects your credit score more than any
other aspects. It's approximately 35% of your credit score.
Therefore, if you hold numerous past accounts that are post due on
your credit report then they will significantly hurt your credit
score. Hence, it's vital to ensure that your past due accounts either
read current or paid.
You
can get current your past accounts that are not charged-off. One of
the worst account statuses is charge-off which occurs when your
payments have passed 180 days after the due date. There are accounts
that are delinquent even though they are less than 180 days past due
date; you can save them by paying the full amount. It is worth noting
that the farther behind your move, the higher your catch-up payment
will be. Therefore, call your creditors soon to start a payment plan
and get back to current.
You
can negotiate terms so that they can waive some of your penalties or
spread your past due balances over some time. You ought to inform
them that you are worried about charge-off thus you need their help.
The creditors might understand you and even re-age your accounts to
read current payments rather than the delinquent.
Then
pay the charge-off account balances. Don't let them get older because
your outstanding credit balance will hinder you from obtaining new
credits. Therefore, paying charge-offs must top your list of credit
repair. After paying them in full, your credit report will be updated
to read paid. However, the charge-off status will show in your report
for seven years. However, you may convince the creditors to delete
your charge-off status from your credit report at a fee.
Nevertheless, it is not easy to do this. Your focus should be to get
a favorable account status.
Management
of Collection Accounts:
Next
step is to manage collection accounts. Normally debt accounts are
sent to a collection agency after they have been charged-off or have
been dormant for several months. You can either pay them in full or
pay less than the balance.
Check
Loan Status:
Following
thing is to check your loan status if you have any. If you borrowed
money and still close to the original loan amount, it will affect
your credit score negatively. The more you pay the loan the better
for your Fico score. However, before paying other loans focus
on clearing credit card balances because they have a worse effect on
your credit score.
Prioritize
Payments:
Then
prioritize spending money in the process of credit repair. You should
focus on accounts which are almost past due first then make all
current. Afterward, bring down your credit card balances.
Take
A New Credit:
Once
all your loans are current, take a new credit to help build your
score. The secret is to resolve negative items on your credit report
and add positive information on it. You can do this by making early
payments since timely repayment will boost your scores.
Also
going forward, you should pay all bills on time. This will add
positive information on your report too.
You
can do your best to salvage your credit score. However, at times you
may get rejections from lenders or get financially strained. Worry
not, you can get credit counseling to help you move
forward.
Again,
you don’t have to repair your credit alone while you can get a
financial coach who can advise you on how to get out of debt,
smart money management, increasing income and building wealth.
He will give you strategies for success and make you understand how
investing works, and how to incorporate it in financial planning.
At
times bankruptcy may be inevitable when you have explored all options
but not working. If so then file it early instead of trying
strategies that won’t help in the long run. You can start again
afterward and rebuild your life. You can seek Columbus Financial
experts to guide you through financial planning and money
management strategies.
It
is possible to live with bad credit in America today, nonetheless, it
makes life very tough. The bad credit score makes several things
impossible, more expensive or very difficult. For instance, some
insurance companies charge higher interest rates for drivers with bad
credit scores. Banks will check your credit scores before they can
grant you any loan or credit card. When you are getting new utilities
using your name, the corporation will confirm your credit scores
first to decide whether you pay a security deposit. Therefore, do
your best to improve your Fico score.
If you have any financial issues we can help! Call or visit our web page today.
Columbus Financial & Success Coach
Transformation Financial Life Coach
614-282-3162
www.columbusfinancialcoach.com
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