For most people in life the major financial purchases like buying a house or a car require credit. Of course, in order to be approved for credit you must have a good credit score. Life and finances both tend to be less expensive and much easier when you have a good credit score. But what can you do if your credit score is already shot?
There are some steps that you can take to improve and repair your credit. The first thing that you need to do is to get your free credit report from all of the big three credit bureaus, which are TransUnion, Equifax and Experian. There is distinctly different information contained on each report and you may need to take steps to fix bad information on all three of the reports. None of the bureaus use the same calculations or information so it is possible that one report may be good and the other two bad or some variation of that.
Any creditor may use just one report or any combination of all three so it is important to make sure that all of the reports are as clean as possible. There may be some information that you cannot change so the best thing to do with that is leave it alone but make sure that you dispute the things that you may be able to change and concentrate on those.
Any inaccurate or erroneous information on your report should be deleted. If it is not your information or it is invalid for any reason you need to dispute it as soon as possible. The bureaus will have 30 to 45 days from the date of dispute to prove that the information is correct. If they cannot prove the validity of it they must delete it from your account.
You can also contact the original creditor and see if they will remove the information. If they say they will just make sure that you follow up because it is not a priority for them and it could easily be overlooked. It is your responsibility to make sure that they follow through.
It can be a tedious and slow process to repair your credit. It may take more time than you realize to get the results you want but once the process is completed you can relax more in your financial life.
As you work towards repairing your past credit it is crucial that you maintain and make sure that you do not get any more bad credit. You must live within your means and avoid using your credit cards or loans. It is also imperative that you make all of your payments on time, every time.
You will also need to pay down your debts as much as you can. A huge deciding factor in credit scores is the actual debt to available credit ratio. Do not borrow more than 15 to 35% or the money you have available for credit to ensure the highest possible credit scores.