As far as the majority of people are concerned, the major financial purchases such as buying a car or purchasing a house require credit. Most folks just don?t have the upfront cash.
Now in order to get credit you need to have a good credit score. Your financial life is always much easier and it doesn?t cost nearly as much when you have a good credit score.
But if you credit is already bad is there anything that you can do?
There are specific steps that you can take to increase your credit scores and repair your credit.
Get your credit report.
The first step is to get the free credit report from each of the big three credit bureaus, Equifax, Experian and TransUnion.
Each report is different as each bureau uses their own way to calculate and report so there may be separate information on each report that you need to fix. One report may be good while the other two are bad or they may all have problems.
Be aware that a creditor may use the reports from just one of the bureaus or from all three. Therefore it is important that all of the reports look as good as possible. If there is information that you cannot change just leave that be and concentrate on the things that you can dispute and change.
Look for errors or inaccurate information.
All of the erroneous and inaccurate information on the report should be removed. You will need to issue a dispute as soon as possible. The sooner you make the dispute the sooner it can be deleted as the bureaus have 30 to 45 days after receipt of the dispute to prove the information is correct.
If they cannot prove that the information is valid it must then be removed from the report.
Another option is to contact the original creditor and see if they will remove the information. Just make sure to follow up with them because it could easily fall through the cracks since it would not be a priority for them.
Repairing your credit can be a long and tedious process. It may take more time than you think so be prepared to have patience. Once the process is complete you will be able to relax more by knowing that your credit is as good as possible.
It is crucial to make sure that your credit stays good and that you do not incur any more bad credit. That means living within your means and not getting new credit. You must also be consistent in making your payments on time, every time.
It is also wise to pay down your debts as much as possible. One of the major factors in credit scores is the amount of debt compared to the available credit. Make sure that you have not borrowed more than 15 to 35% or the amount available.
Image via Flickr by Corky