Beginning Steps To Better Credit Today

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All too often having good credit is a necessary part of life. We all need to have good credit in order to qualify for mortgages, car loans and credit cards. However, for many of us past financial problems and times of financial difficulties have destroyed our good credit. There are some steps we can take to begin to repair our credit and restore some stability to our financial lives.

Before you begin to repair your credit you will need to get a copy of your current credit report from each of the three main credit-reporting agencies, TransUnion, Equifax and Experian. You can take advantage of the free report that you are entitled to each year or you can pay a fee and receive either a separate report from each company or a tri-merged report that contains all three. It may be simpler to assess the information on your reports if you have it all on one report.

Once you have your reports, you will need to examine them for inaccuracies and erroneous information. It has been estimated that as many as 70% of all reports do contain mistakes and inaccuracies so there may be some obvious mistakes that you can attend to immediately. You should also check for older and outdated accounts that have passed the statute of limitations in your state. Many times you can get those listings removed on that basis alone.

Make sure that your credit report is showing your highest credit limits. Many creditors under-report credit limits or fail to report them at all. A large percentage of your credit score is based upon your available credit compared to the credit you have used so it is advantageous for you to make sure that all of your highest credit limits are reported. It is also important to keep your debt level below 20% of the credit available to you. One trick to quickly increase your credit score is to just get a creditor to raise your credit limits.

Oftentimes duplicate accounts will show up on a credit report. Even if they are not reporting negative aspects it is still detrimental because it shows more outstanding debt than you actually have. The highest credit scores belong to the people with the least amount of debt yet the most available credit.

Be aware that all reporting is based upon the date of last activity. Therefore it may not be to your advantage to pay off an old debt, especially an old collection account or a charge-off. If you pay if off it will bring all of the old negative information forward on your account and may hurt you more than if you leave it alone. Collection accounts are also notorious for being passed on to other companies and even though they are supposed to make sure that they remove it from your account when they no longer own the account many times that does not happen. Check that the accounts are not duplicates and that they are all valid.

Make sure that you address and dispute all unknown items on your credit report. Many people have other people?s information showing on their report. This frequently happens if you have a common name such as Smith or Jones but it can also happen to anybody if the numbers on their SSN get transposed. Make sure that the credit listings on your report belong only to you and that they are accurate and coincide with your own records.

It is also smart to begin to build new credit by getting a credit card. If you cannot as yet qualify for a regular credit card, you can get a prepaid card. Do not get credit from department stores, furniture stores or the like to establish credit because the credit bureaus look upon that type of credit as a negative and it is detrimental to your score.

It may be beneficial to hire a professional credit repair company to assist you with your credit repair. A good credit repair company will have the expertise to guide you through the credit repair maze quickly and efficiently. Of course, you can always attempt to complete your repairs on your own also but in the interest of efficiency, hiring a professional may be something to consider.

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