Making Necessary Changes With Credit Repair

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The current economic climate has affected many people. Many who have never had credit problems in the past are now facing low credit scores and derogatory marks on their credit report. With job losses piling up, health care woes and the credit crunch that makes it very difficult for small businesses to borrow needed money, there are many people who are now suffering with financial hardship.

Even though many people have plummeting credit scores the fact is that many people do not really realize just what is considered in a credit score. For example, if you shop for credit and there are inquiries on your report it will actually lower your chances of being able to obtain that credit because with every inquiry a credit score goes down.

Another very important factor for credit scores is the debt to credit ratio. Debt to credit ratio is defined as the amount of debt that you have compared to the amount of credit that you are approved for and have access to. It is best to have high credit limits and low amounts of debt, so you have credit available but you do not use it. It is wise to keep your outstanding balances at 20% or less of the available line of credit for the highest credit scores.

You also have the right to dispute any questionable credit listings that are showing on your credit report. Many credit reports contain erroneous information and because of that Congress passed a law called the Fair Credit Reporting Act back in 1970. This law governs the collection, assemblage and dispensation of individual personal credit information. It is under this law that a consumer can dispute and challenge anything on a credit report and possibly get it removed.

Under the FCRA a consumer also has a right to receive one free credit report each year from all of the three main credit-reporting agencies. It is not necessary to sign up for any credit monitoring services in order to receive the free report you need only contact the credit bureaus directly and you will receive your report.

A smart consumer will take advantage of this free report to make sure that everything is being reported in a proper manner. Credit reports change frequently and it is estimated that as many as 75% of all credit reports contain errors that can be repaired. Get your free report and make sure that it is as accurate as it can be.

Once you have identified discrepancies and errors you have the right to dispute them. You must send in a certified letter that states your case and why you believe the information should be deleted. If you have any type of paperwork that is proof, include copies of it also. Once the credit bureaus have received the letter they then have 30 days in which to either verify the listing or delete it from the report.

There are also other measures you can take to improve your credit. To change your debt to credit ratio, you can either pay down the debt to below 20% or you could also get the credit limit increased. Avoid all inquiries on your report and of course it is always important to make sure that all of your bills are paid in a timely manner and that all of the credit you have now is in good standing.

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