Credit Repair in 4 Steps

Bad credit can really take a toll on your financial position. Should you need to take out a loan or open a credit card, the situation will be very difficult as you struggle to convince lenders that you can handle credit responsibly. If you are lucky enough to find a lender who is more accepting of your creditworthiness, the interest rates will be very high.

Are you tired of all these concerns? It is time to improve your credit score. An expert guide is what you need, and we have one right here for you.

1. Get Your Credit Report

It is free. Did you know that you can get up to one credit report free per year? If you have not yet received a copy, check with the credit reference bureaus in your country to view one. Some countries use a number of companies to manage credit reports, and you can access them from each for comparison.

Reading the report is the first step that will guide you in making the right decisions for your life. Surprisingly, you may find some incorrect information that has been affecting you. The credit bureaus allow users to lodge complaints, and many usually get help. Once you view the report details and see that you need some credit repair, it is time to move to the next steps.

2. Pay Past-Due Bills

For those who do not know, the payment history determines up to 35% of the credit score. It is time to pay any past due bills that were left unattended. Your credit report has all the information necessary to start working on the payment history. You can speak with the relevant lenders so that they can report to the credit bureaus that you have paid past-due bills or that they are being repaid currently.

A professional can assist you in dealing with this if it is too complicated. Sometimes, serious negotiations with the relevant lenders are required. They may even review the repayment terms to have you pay what is affordable without defaulting. But if your accounts have undergone a charge-off, you have no option other than to clear them at once. A charge-off takes about 180 days to be completed in many countries.

3. Work on Your Credit Card Ratio

This is the ratio between your credit card usage and the balance limit provided. It is time to bring the usage of this card to a lower level even if your financial position is not all that good. If you cannot make most of your purchases in cash, you probably need to change your lifestyle. Capable experts agree that proper credit card use will bring your credit score up. You can visit their website to find more insights from them.

4. Obtain New Credit

By now, you have cleared up some past messes that have been hurting your credit score. It is time to focus on adding some positive information. So, why not get new credit? It has benefits when the necessary steps are taken.

·         Open a new credit card — many companies are willing to give you an additional credit card account so that you can have two. If you are not tempted to overuse them, they will improve your available credit to debt ratio. The trick is to keep their credit utilization in good shape to show financial responsibility.

·         Piggyback on an old credit account — there is no excuse because they are sold nowadays. But the best idea is to piggyback on a credit account that you know well just like college students piggyback on their parents’ accounts.

The Takeaway

Now that you have completed all these steps, you must monitor your credit score. The aim is to see it grow, and anything that pulls it back down should be resolved pronto. It is time to start the repair process.