Top 5 ways To Improve Your Credit

Your credit rating is extremely important to your financial future, and those with a low credit rating will often find it difficult to get any sort of finance until their credit improves. This could affect your abilities to get anything from a credit card or loan to a mortgage or car finance, and as a nation that relies heavily on credit this could spell disaster for many. 

Your credit rating can be adversely affected in a number of ways. Most commonly is failure to make bill and finance repayments on time or defaulting on payments altogether. However, other factors such as association with those with bad credit or being the victim of identity theft can also affect your credit rating – as can a simple human or computer error by credit reporting agencies or agencies that register details with these companies. 

There are a number of ways in which you can help to improve your credit or maintain good credit. This includes: 

1. Always maintain timely repayments on bills and financial obligations, as this will help to maintain good credit. If you already have a tarnished credit history or rating make sure that you focus on making all of your repayments on time and for the amount s requested to try and start improving your credit. 

2. Keep a check on your credit report. This can easily be ordered from the credit reporting agencies. Monitoring this will enable you to check that no errors have been made that could be affecting your credit rating, and will enable you to identify any cases of fraudulent activity that could also be affecting your credit. 

3. If you already have poor credit consider taking out a credit card or loan that caters for those with bad credit. By taking out a bad credit loan or credit card, and making sure that you make the repayments on time and for the amounts requested, you can start to slowly bring your credit back up. 

4. Focus on paying off your debts. If you have a high level of debt then you run the risk of falling behind with repayments and adversely affecting your credit. By clearing the debt as quickly as possible you can reduce this risk. If you already have bad credit and are in debt, you could see improvements in your credit rating by clearing the debts as quickly as possible and ensuring that you pay at least the requested amounts on loans and bills each month. 

5. Look out for scams that offer fast solutions to repairing credit. These usually charge a fee and offer only a temporary reprieve by questioning any factors that may be affecting your credit. The best way to repair your credit is to be sensible and responsible about repaying your debts and paying your bills, and although it may take some time this is the most effective long term solution to credit repair.

Credit Repair the Do-It-Yourself Way

Negative remarks on your credit report can cost

serious money. You do not have to despair though,

since it is never too late to become credit worthy

again. However, always remember that credit repair do

not happen overnight. It requires serious dedication

and perseverance to start in a clean slate once more.

How to Get Started

You should know what the three credit bureaus are and

what they are saying about you. Since creditors do not

have to report to Equifax, TransUnion and Experian all

together, they generally only report to one or some to

which they are subscribed to. This only means that

each report from each bureau is slightly different

from one another.

The first thing you need to do is to order your credit

report. Remember to order it from each bureau because

you would only waste time and money if you only order

a credit report from one bureau. The cost of the

credit report might vary from state to state though it

is estimated that the cost of your credit report is

around $9.

However, you are entitled to a free copy of your

credit report from the agency if you have been denied

of employment or credit due to your credit report. You

can ask the company to provide you with the name of

the credit bureau, telephone number and address.

Once you get a hold of your credit report, examine it

carefully. Since the credit bureaus create your credit

report basing on the information they receive on your

creditors, they are never verified. It is your job to

maintain your credit report a good reflection of you.

Be on the lookout for errors on typing, incomplete

information, and outdated and inaccurate histories of

your account. After examining the report correctly,

list all the errors you want to dispute and the

reasons why.

Since bad reports cost money, remember to be thorough.

You have two choices, which is to either complete the

argument form supplied with your credit report or

write a letter. It is also recommended to send a

photocopy of your report with the errors circled to

the credit bureau who supplied the report.

Additionally, do not forget to include supporting

documents with your report.

After sending the documents and report, do not forget

to keep copies of all the forms and the date you sent

it. Normally, the bureau will investigate the dispute

in the span of thirty days prior to receiving your

letter. More so, any item that is proved to be

inaccurate is removed.

Stability in Your Credit Life

Another way to repair your credit is to show that you

can still work on adding positive information and

stability in your credit life. Even if you have the

credit, there can be a time when you get denied of

credit due to insufficient credit file. There are

several creditors that do not report your credit

history to the credit bureaus. What you can do is to

try asking the grantors to report the information of

your account and the history of your monthly payment

to the credit-reporting agency.

You can also try building a solid credit history

through the use of secured credit cards. These kinds

of credit cards are offered to those with no credit or

in the process of repairing their credit.

Additionally, it is advised to open a savings account

in your bank. Doing so, would show your creditors that

you are trying to save and that you are reserving

money to pay off your debts.

Credit Repair

Many companies out there advertise that they can help you with credit repair, but the quality of these services - not to mention what they offer - varies widely. Some companies really can help you with credit repair while others are actually under investigation for suspect business practices. If you decide to seek help from a credit repair company, be sure that the company is legitimate and offers you viable services.  In general, you should be looking for non-profit credit counseling services rather than credit repair companies (some of which are really just lenders offering home equity loans anyway, which are of limited use to you if you want to improve your credit).

Check to make sure that the company has good standing with the Better Business Bureau and clients who are happy with the credit repair services they received from the company. Always read the paperwork carefully before you sign and make sure that you understand how much you are paying for and how much you are paying.

Before deciding to seek help from a credit help or credit counseling service, be sure that the problem cannot be resolved on your own. Indications that you may need credit counseling include:

-You cannot pay your bills and avoid the necessities of life.

-You avoid the phone, the mail, and the door because you are being harassed by collection agencies.

-You have avoided going out because you feel terrible about your financial state.

-You have no idea how you will repay your bills and loans - you do not know where to start.

Fixing Errors on Your Credit Report

Traditionally fixing errors found on your credit report had been a difficult and confusing with the old complaint systems made available by the credit bureaus.  Recently Experian, Equifax & TransUnion have all updated their error dispute systems to make it easier for consumers to submit complaints regarding the fixing of errors on their reports and have included features within the new systems that also make it easier for the credit bureaus to make a determination regarding the item being disputed and how it will be addressed. 

    Some of the new features of the new error complaint systems include the following.

• Allows the attachment of supporting documents
• Provides a section where the consumer can state full details of the case

The changes to the previous error reporting and dispute systems once used by the consumer credit bureaus was prompted by new legislation presented to congress known as  The "Stop Errors in Credit Use and Reporting (SECURE) Act"

The "Stop Errors in Credit Use and Reporting (SECURE) Act" would require credit bureaus to perform a more diligent investigative and take corrective actions.  

The legislation states that the credit bureaus would now be required to :

• Better investigate consumer error complaints
• Review all new information submitted by consumers regarding the dispute
• Submit all supporting documentation provided by the consumer to the lenders involved in the disputed information
• Provide a free credit score annually to consumers when they request their free credit report
• Gives consumers the ability to take the credit bureaus to court when errors have not been fixed

Dealing With a Credit Score after a Big Problem

    If you have bad credit, establish better credit by taking out credit and repaying it quickly
If you have terrible credit following a bankruptcy or other major financial upheaval, you may need to get back into a good credit rating by taking out a loan you can handle. Make an appointment to see your bank or bad credit lender a few months or years after the problem in question and arrange for a small loan.
You should have enough savings to pay for the loan before you do this. Pay back the loan quickly. It will not hugely boost your credit score but it will show lenders that you are having an easier time paying your bills. Taking out a small loan you can repay is part of the slow process of reestablishing good credit following a big financial problem.

    Try secured credit if you cannot qualify for other types of credit Secured credit is credit or a loan which uses something as collateral. In some cases, this could be an asset like a house. In some cases, this collateral could be money frozen in an account by the bank for just such a purchase.

If you need credit following a big problem with your credit score, secured credit may be something you can qualify for. You can use this secured credit to reestablish a good credit rating so that you will qualify for other loans in the future. You may have to pay slightly higher interest if your credit score is quite low, but in the long term repaying this type of loan can improve your credit score after you have repaid your debts and resolved the problem.

In fact, major problems such as a bankruptcy will remain on your credit report for seven or ten years, affecting your credit score. Even if your credit problems stem from simply not paying bills on time, it will take some time for the mark to fade from your credit report and for your credit score to reflect your better repayment.

Paying off your debts and resolving problems will help your credit score (since overdue accounts will be marked as “paid” on your credit report), but only time will remove the mark of the problems from your record entirely.