Few people in the world can just go out and pay cash for life?s large purchases. House?s and car?s are the items that most often require financing and they are also things that we all need. The problem is that in order to get financing to buy a house or a car you need to have good credit and high credit scores. But unforeseen problems and circumstances can happen to anybody and low credit scores and a negative credit report can happen to anyone.
If you have bad credit because of difficult times you are not alone. Many people are in the same boat. However, nobody is destined to have bad credit forever and there are some steps that you can take to improve your credit. Actually, the truth is that if you just start now to pay everything on time, your credit will get better in time without any extra steps.
But you can speed up the process. The first thing to do to get started is to get a current copy of your credit reports from all three of the main credit reporting bureaus. You are entitled to a free report each year so you can start there. You must get a copy of all three of the reports because they each have varying information and they each use different methods to determine your credit score. Creditors can choose only one report or use all three so you need to make sure and take care of all of them.
Examine your reports thoroughly and take note of any inaccuracies. It is estimated that as many as 75% of all reports do contain errors so check carefully. If you find errors you will need to issue a dispute to the credit bureaus about the inaccuracies. Check for items that do not belong to you, inaccurate balances, interest rates or credit terms or even misreported late payments.
After the credit bureaus acknowledge receipt of your dispute they will have 30 days in which to verify the accuracy of their listings or delete them from your report. After the 30 days they have 5 days in which to send a response back to you. If you do not have success with the first letter, be prepared to send another letter and as many letters as it requires.
Along with issuing disputes to clean up the old credit it is also crucial to keep your current or new credit excellent. Make every payment on time. Another important factor to your score is the debt to credit ratio, which is the amount of debt you have compared to the amount of credit you have been offered. The best scenario is a high limit with a low debt-load so try to keep it under 20% of the limit.
Occasionally people have success by contacting the original lenders and negotiating to have them remove the negative listing. Often you can settle with an old creditor for a reduced amount. If they promise to remove the negative listing from your credit report, make sure and get it in writing before making payment.
Credit repair can be completed. It may take some time and expertise to really accomplish some good results, however, the peace of mind of knowing that your credit is good when you need it is priceless.
