Repair Your Credit
Once you realize that your credit report does not look too good, then you will need to take action as soon as possible to repair your credit. There may have been a time when your credit score only affected whether or not you could get a loan, but things have most certainly changed. These days, utility companies will check your credit to determine whether or not you will have to pay a nonrefundable deposit. Cellular phone companies will have to check your credit before you can be approved to get a telephone. Your potential employer may even check your credit before determining if you will be a responsible employee or not.
There are many ways that your life could be negatively affected by bad credit. When you realize that your credit is in disrepair, then the first thing you need to do is get started repairing it. Just how do you do that? There are some steps you will need to take.
Start by Getting a Copy of Your Credit Report
You will need your credit report in order to determine what is wrong with it and why your credit score is so low. Be sure to get the credit report from all three reporting agencies – Experian, TransUnion, and Equifax – since they can show different things and you will need to know about the problems with your credit on all three. What should you look for on your credit report? Here are some of the things that you should consider may be negatively affecting your score:
- Late payments (30 to 90 days late. These will stay on your report for 3 years)
- Delinquent accounts (credit accounts that you just did not pay)
- Too many open accounts
- Too many accounts with balances
- Too many maxed out accounts
- Too many checks on your credit
- Erroneous claims on your credit records (these can be disputed)
- Not enough credit in your name
Look for these things because they will give you clues as to why your credit score is low. You cannot start to repair your credit until you know what is wrong with it.
Repairing Your Credit
Once you have identified what is wrong with your credit report, the next thing that you will need to do is get started repairing it. There are quite a few different steps that you can take in order to repair your score. Here are some things that you can do.
- If you have too many open accounts, then simply close some of them. You may even have open accounts that you forgot about. Be sure to close all of the accounts that you can. Do not close every account though. Having a few open accounts is actually good for your credit score.
- If you have too many accounts with balances, then try consolidating some of them. It could be that you could consolidate and then close the extra accounts, which can help your credit score.
- Too many maxed out accounts is actually very bad for your credit score. You need to pay them down so that you have at least ten percent available of each limit on your credit, so that means you need to pay down the accounts if you can.
- If you have an erroneous charge on your credit report, then you need to get this repaired. You will need to write a dispute letter to the credit reporting agency and then make your case for why the record is wrong.
- If you do not have enough credit, then you can repair this as well. Try applying for a secure credit card or applying for store credit at a local business. Even a small credit account will help your score.
Avoiding Future Mistakes
Of course, there are some things that you just cannot repair on your credit and you will have to wait them out. This could include the late payments or delinquencies. However, you can still do things to help repair your credit. All you need to do is not make any more mistakes that could affect it negatively. This means paying all of your bills on time and not opening any unneeded credit accounts.
When you realize that you have bad credit, then you need to get started repairing it as soon as possible. Your credit record affects you in ways that you may not have imagined, and you need to make sure you are not affected too badly by these things. You can do things to repair your credit report. All you need to do is take the action mentioned above.