Credit Repair Note: If you choose to use a paid company then there is one that stands above all the others and is highly suggested. They give superior service in repairing your bad credit and improving your credit score. Review our comparison guide to find the best firm to repair your credit.
Credit Repair
How do I repair my credit? Have you been refused credit or maybe even insurance that you desperately needed then you have probably asked this question but you are more than likely at a loss about what's involved with credit repair.
Essentially you have two choices when you need to repair your credit and they are undertaking it yourself or paying for credit services. My own preference is the self repair method but most don't have the time nor will for this. If this is not your preference then review our comparison guide to find the firm that best suits your needs.
It can be very expensive to have bad credit. For example, every additional 1% to a 30 year mortgage adds 25% to the amount paid: a $300,000 mortgage @ 7% adds $75,000 more over 30 years than $300,000 @ 6%. Doing nothing about your bad credit is much more costly than fixing it. Take a closer look at the savings and benefits you will enjoy.
Credit Score
Before you can begin to improve your credit you will need to know exactly why you have a low FICO score.
You need to get your credit report from all three credit bureaus, Equifax, Experian and TransUnion and look for errors and derogatory data that could cause a drop in your credit score. Remember that it is important that your report also include your score which some do not especially the "free" ones. Also, it is best to get ongoing credit report access so that you may monitor your improvement over time.
To learn more about what exactly comprises your credit score visit our very informative credit score basics page.
What is your credit score? Find out now
Repair Your Credit
What am I Looking For Exactly? When reviewing your credit report you want to search for mistakes. Mistakes on your report are accounts that have inaccurate information. One possibility is that a tardy payment is shown when in reality this is not the case or maybe the credit limit is inaccurate so your balance shows as being over the limit.
Your credit score will go down when there is negative information in your credit report. Examples of negative information include tardy payments, legal judgements, charged-off accounts, bankruptcy and collections.
What Do I Do after I Find These Accounts?
To start, list all these negative accounts. Next, position these accounts so that the oldest is first and the newest is last.
You will then write and mail a credit dispute letter referencing the first two negative accounts to each of the three credit bureaus that is showing this negative information. Remember there are three bureaus which have different reports so it is critical that a dispute letter is only sent to the bureau that is showing the negative account!
How To Write A Credit Dispute Letter
Basically this letter will tell the bureaus that the information in your report is inaccurate. Include the following in your credit dispute letter: name, address, account number and social security number. In addition write the reason the information for the account is inaccurate. Here is a sample credit dispute letter.
How Will a Letter Help Me Fix my Credit?
Under Federal Law the bureaus must investigate and confirm these inaccuracies with the original lender. If proof of these inaccuracies is not provided by the lender then the negative information must be deleted by the bureaus. By having these negative items removed your credit score will then be improved and your credit will be fixed over time. This is the same tactic used by the professional credit services.
For more information read our detailed "Step By Step Guide ".
Build Credit Fast Using Secured Credit Cards
One of the best methods you can use to build credit is through secured credit cards. For that matter, this method may be the only safe option to build credit for those who have borderline or severely bad credit. A mistake you don't want to make on your road back to good credit is to apply for credit and not get it. This is because a credit denial requires an inquiry by the lender and this inquiry can decrease your credit score by 2 to 3 points. This will be avoided since a secured card can be obtained by almost anyone. The primary qualifications for most secured credit cards (Visa or Mastercard) are to have a legitimate social security number, earn a minimum of $1,000 per month, have a checking account, and be at least 18 years old...
Read more on "Build Credit Fast Using Secured Credit Cards ".
Prevent Identity Theft Now Before It's Too Late
It's much less painless to prevent identity theft before it happens than to have to repair it after you are a victim. Applying a few easy practices will be very helpful in protecting yourself and will make it difficult for anyone to get a hold of your personal data.
Applying certain guidelines will be helpful in preventing identity theft, however, keep in mind that some things will always be out of your control. Banks and other places of business that require your information could be vulnerable to thievery themselves, be it internally by employees or externally by hackers. Following are a few helpful tips you can do to protect your personal information...
Read more on "Prevent Identity Theft Now Before It's Too Late ".
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