Any person out there can take steps to repair their credit. There are concrete steps that anyone can take that can make significant improvements. However, when people consider credit repair there are also some common myths and mistakes that hold them back. Credit repair can be achieved with the right strategies.
If you are waiting until a personal credit crisis passes before you begin credit repair you may be making a mistake. While it is important to have a steady income so that you can maintain the repairs you make you should not just wait for your credit problems to go away. If you are proactive and begin with paying down your debt and searching for ways to improve and diversify your credit portfolio you could have good credit much sooner than you expected and that is important because you never really know when you will need it.
Should you close accounts?
Do not close any of your older accounts even if you are not using them.
The length of your credit history determines much of your credit score, if you close your older but unused accounts you actually end up erasing that history. This ends up lowering your score rather than improving your credit and increasing your score.
You must also be careful about canceling credit cards or other types of revolving credit. Another significant portion of your credit score is the ratio between your available credit and your debt. By closing your accounts you are essentially lowering your available credit limit which ends up reducing your credit score. If you do not wish to use a credit card that you have just stop using it and put it away but keep the available credit limit available.
Should you keep on charging away?
If you charge more on your cards you will end up hurting your credit score. Maxed out cards are very damaging to your score. The people with the highest scores actually have credit available but rarely use it. For the highest scores you should be diligent about keeping your balances below 20% of your available credit limit.
What about correspondence?
All correspondence between you and your creditors should be read and kept track of. There is only a short window of time in which to respond when there is a mistake made and mistakes can be common. If you are actively disputing inaccurate or erroneous items on your credit report you especially need to be careful about all correspondence as they will only have a 30-day window in which to respond. Everything that you send to the credit bureaus or your creditors should be with registered mail.
You need to be organized as you are doing your credit repair. It is especially important for you to periodically check your credit report and scores in order to find out which credit repair strategies are working and which may not be. Although credit repair does take time you should be able to see some continuous improvement and progress towards better credit and scores.
You can achieve better credit than ever with some proactive steps on the things that you can change and the passage of time on the things you can?t change. Your credit will improve if you are proactive in taking steps to repair it.
Are you trying to repair your credit? What are you making sure to do?