Credit Repair Can Help You Achieve Your Goals


When your life gets out of control, one thing that often suffers is your credit rating. Maybe you were so busy you forgot to pay the bills. Maybe you lived off your credit cards, running them all up to the maximum limit. Maybe there was a serious illness or other crisis, and taking care of financial obligations was the last thing on your mind.

Now your credit is ruined. Credit repair can help. There are many ways to repair your credit and they all take time. If you're a do-it-yourself type, you have several options. Communicate with everyone you owe money to. Often you can get a better interest rate, lower payments, or have part of the debt forgiven. Utility companies are often willing to set up payment plans if you have large past due balances that you can't pay in full. Communication is the number one key to repairing your credit yourself.

Start paying your bills on time. Even if you have to pay the minimums, make sure you pay them. This is a giant step forward toward credit repair. Most credit cards have a grace period, a period of time in which your payments can be late and not count against you. Call and find out what this is. Many of us have to stagger our payments throughout the month and knowing what the grace periods are will help you plan. Also find out when your late payments are reported as delinquent. Often, this is thirty days after the payment is due. Make sure you pay the bill before it is reported.

Get your credit report. You are entitled to one free copy of your credit report from the three big credit-reporting agencies every year. You can order them online and, in most cases, have them delivered electronically. You are also entitled to a free copy of your credit report every time you are denied credit, insurance, or employment based on your credit history. By knowing what is in your credit report, you can start working on your program of credit repair.

Accurate negative information in your credit report cannot be removed, no matter what people might tell you. Depending on the type of information, it can stay there up to ten years. Don't let this stop you on your quest to credit repair. The older the bad information is, the less it affects your credit score. Just start fresh and make sure you stay on top of the bills.

Don't apply for new credit until your old credit is repaired. Every time you apply for a new credit card or loan, your credit report is pulled. And, if your credit is bad, this counts as a ding against you. Also, don't run your cards up to the maximum. Try to owe less than half of your available credit. Creditors like to see a healthy debt-to-income ratio so make sure you don't owe more than you can comfortably afford.

Once you get credit repair, take steps to avoid having it happen again. Don't close your credit accounts. This will also count against you. Lenders like to see a long history of credit and those old cards can help. Just don't use them. Put them in a drawer, freeze them in a block of ice, just make sure you leave them at home. You can always pull them out in an emergency, but if you don't have them with you, you won't be tempted to use them for non-necessities.

If your credit report shows negative information that is not true, you have the right to dispute the information. Send letters to the credit reporting company and the creditor telling them you are disputing information in your file. Be specific and send proof, such as copies of old bills, copies of cancelled checks, and other documents. They then have 30 days to investigate your claim and must update your credit report with their findings. If they don't agree with you, you can put a letter in you credit report indicating that the amount is in dispute and explaining why.

If your life changes, through divorce, death, remarriage, or any other event that might affect your credit, be sure to take a look at your credit report and see if there are any items that can be fixed with credit repair. If you divorced and your spouse got the house and mortgage, make sure that is reflected in your credit report. If you remarried, make sure your new spouse isn't bringing bad debt that will affect your credit rating.

Credit repair isn't easy and it won't happen overnight. It takes discipline and hard work. However, you'll be surprised how quickly your credit score rises as you begin to focus on pulling your financial life together.