We all need to have good credit scores in order to function in our economy. Home mortgages, car loans, credit cards and more all require good credit. Luckily, since many of us have had credit difficulties at one time or another, there are a few tips and techniques that can help improve and repair your credit.
There are 3 major credit-reporting agencies, TransUnion, Equifax and Experian. Make sure that you get a current credit report from all three. You are entitled to one free report each year. However, if you are willing to spend a few dollars it may serve you to get a tri-merged report that has all of the information from all three reporting agencies compiled into one report in an easy to read and understand format. Having all of the important information on one report may make your credit repair job much easier.
Be aware that just because something is listed on the reports it does not mean that it is accurate or that you cannot dispute it. Credit reports are notorious for having inaccurate information. Make sure that all of your highest credit limits are listed. Credit scoring is often based upon the balance of your debt compared to your available credit. Make sure that your debt does not exceed 35% of your limit. You can also request higher limits to do this if necessary. Just make sure that the high limits are reported.
Often you will find duplicate accounts listed on your report. These duplicate reports may not be derogatory but they still affect your scores negatively because they show more outstanding credit than you actually have. To raise your credit scores get higher credit limits and maintain lower debt balances. Duplicate accounts detract from this goal because they show more debt than you really have.
Collection account showing up on your report should often be disputed. Never pay off an old account that is an old collection account or a charge-off. The reason for this is that by paying it off you bring the account current and it now shows on your report as negative credit. Also collection accounts are often bought and sold and even though companies are supposed to notify the credit reporting agencies that they no longer own the account oftentimes this does not happen. This can result in duplicate accounts on your report. If you have a recent and accurate collection account it is best to pay it off.
If there are any unknown items on your report make sure that you dispute them. Frequently other people?s credit winds up on the wrong report. If you have a common name or share common characteristics with someone else this happens more often. Also be wary of identity theft. If there is credit showing on your report that you know does not belong to you, dispute it and get it removed.
As you are repairing your credit start working towards building new positive credit. Do not get department store or furniture store credit to accomplish this, as that type of credit is not seen as positively as other credit. Get a MasterCard or a Visa. If you are unable to qualify for a regular credit, card start with a prepaid card. You can get a prepaid credit card for as low as $300 and then work your way up to a regular credit card.
You can attempt to repair your credit yourself, however, it may help you to consult a professional credit repair company. A company that specializes in credit repair has the expertise that can do it right the first time and you will have good credit before you know it.
