The Facts that You Need to Know About Repairing Credit
If you are trying to get a loan for the car you desire, a phone plan that looks too good to pass up, or a beautiful apartment that you want to live in, you may have gotten denied to get those things. It was probably because you have a poor credit score and the people offering these items would be hesitant and may not want to do business with you. It can be difficult to get around and get the things that you need, like car loans or a place to stay in because of your poor credit score.
Luckily for you, you don’t have to sit and let the effects of bad credit scores affect you for the rest of your life. There are many ways you can start fixing your credit to be able to get approved for the things that you want in life. Here’s some information and tips on how to repair credit today.
First things first, know why you have a poor credit score
The first thing that you need to do is to know exactly why you got such a low credit score in the first. This will help you plan your mode of action to repair your credit score. Once you get a copy of your credit report from a credit bureau, you will be able to see what caused your credit score to get so bad. This will help you know what parts of your life you should target to start fixing it.
Get Credit Repair Service
A popular way to fix your credit is to get credit repair services from a credit company. These services are a good way to get rid of negative items on your credit report, particularly the ones that are errors. Sometimes, you may end up getting a poor credit score just by one mistake! The people who work at these credit repair companies will be able to get rid of these errors to help clear up your credit history record.
How they do it is they first take your credit reports. They will go to three different credit agencies to take these reports. The reason why they do this is because they may be able to spot negative information that may be on one report but not on the other two. Therefore, they will list this as one of the mistakes that they find on your report, along with other issues that may be the cause of the negative items. Once they find those mistakes, they’ll file them as formal complains and send them over to credit bureaus.
Once it has been filed and has been received, they will then start a dispute to get rid of the negative items on your report. This process shouldn’t take too long, generally it would be about 30 days or a month for a dispute to get resolved. However, keep in mind that it can take up to 45 days depending on the item. This will help eliminate bad credit items that were wrongfully placed to help you on your way to getting a good credit score.
However, it is important to keep in mind that removing these negative items will not always guarantee you a good credit score. It may take time for these things to affect your credit and even if it does, it may not be as effective as you want it to be. The thing about these services is that they aid you to raise your credit score and make sure that everything is as accurate as possible, they will probably not be the sole reason that you will have a good credit score.
Keeping that in mind, you should watch out for illegitimate credit repair service companies. If you give these companies information of your credit and about yourself, they could potentially steal your identity. A good way to know if a company is not legitimate is by seeing what they have to say about their products and services, along with how they deal with you.
If the company promises you that you will have amazing results, then they are most likely not legitimate. In fact, it is actually illegal to say such things, as credit repair services do not always guarantee great results because each person has different credit issues, therefore the results will vary. Additionally, if they ask you to pay for their services before you get them, they may be scamming you. Only trust real companies that ask for the payment once the services are done.
Manage Your Debt
One of the biggest reasons why many people have poor credit scores is because they have mismanaged debt all over the place. A card company will report all your late payments, missed payments, or debt that you have and will most likely send it over to the credit bureaus to add it to your credit history. Over time, this builds up a nasty credit score, along with building up more debt that you will have to face which can easily become bigger due to interest and other factors.
It is important to monitor your credit scores while dealing with your debt. This will help you keep check and know where to go from there. You will want to pay off any balances that you have, particularly on your credit cards. A good rule of thumb is that the lower the number, the better it is. A lot of people recommend that you keep the balances at about 30% or lower, however it is preferable that you make it lower than 30%.
If you have many credit cards that have a lot of debt but you want to get rid of them right away, you should think about taking out a personal loan to be able to consolidate this debt. It may not be easy, but if you are able to find the right lender you should be able to get the loan that you need. Don’t forget to choose a good loan plan that involves a repayment schedule that you are confidently able to follow along with low interest rates. People with poor credit scores may be charged with higher interest rates, so always look for a lender who truly understands your situation and will offer you fair interest rates.
Always avoid charging multiple credit cards for one item. Each time you charge it that way, the report will file it as multiple items on your credit report and disregard the fact that it was one item. Therefore, in the long run it can really damage your credit score and get it really low. As much as possible, try to use one credit card at a time. You should avoid using a credit card often as well so you won’t get tempted to use it too much.
Keep the Good Debt
Surprisingly, there is actually such a thing as good debt and it can be good for your credit report. The trick is to know which is good debt and bad debt. If you have debt on your credit report from a year or so back and you managed that pretty well and paid it off on time, then you can just leave it. The credit report is there to show people that you are capable of paying things back, so something like good debt can be good to have in the long run.
Always Pay on Time
Lenders are not fond of you paying for your dues late, hence they often charge things like late fees or even reconnection fees. However, these fees do not always stop people from paying late, so many businesses have resorted to reporting it to credit bureaus. It is important to start making it a habit to pay off your dues and bills on time and in full each month to avoid getting a lower credit score than what you already have. Remember, this takes some discipline, so make a calendar, make reminders, and separate money from your income each month right away to deal with bills immediately.