We are and have been experiencing a rather depressed yet fast economy; therefore we all need to be vigilant about our credit status. Having a good credit score means that the powers that run and control our overall commerce system deem you as a good risk. Further, it also means you must be a financially responsible individual, at least responsible enough to maintain a harmonic balance between your income and your outlay of money spent for living requirements and desires. It is therefore important that you never miss or experience late payments because doing so will change how those powers that control and run our commerce system view and treat you.
Below are a few tips for those who may want the challenge of starting their own credit repair process. There is no requirement to have to pay someone or another company to do what you can do for yourself. However, there is sound reasoning why you may want to opt to contract with a professional because as with other industries the more time a person has spent learning an endeavor they ordinarily become expert in it. However, most credit repair companies who offer “instant” credit repair are most likely scams.
The first step at doing credit repair yourself is to acquire a personal credit report from all three major credit bureaus. The report you obtain will be one comprehensive report, having three reports within it (also called a “Trimerge Credit Report” or “3-Bureau credit report”) . This is an important first step because you must discover the entire details of what is being reported about you by your creditors to each of the major credit bureaus. The three major credit bureaus are: Equifax, Experian and, TransUnion. There is a method of obtaining one’s 3-Bureau credit report annually without cost by visiting: AnnualCreditReport.com. Another way to obtain a free credit report is when you apply for credit with any creditor, who is a member of and reports to the bureaus, if and when they deny you credit. When this occurs you are, by law, eligible to obtain a free credit report in order to evaluate the reason you were denied. When acquiring your credit report through this means you must present the denial letter you received from the creditor who rejected your application.
Once you have your credit report take the time to evaluate your spending behavior in an honest fashion. Be sure to take special notice of each credit account listed on your report and most importantly be sure that they are all yours. Technology has become a fast and effective vehicle for criminals to steal the identity of others. Therefore, it has become almost common place that consumers find accounts listed in their name but opened by others who fraudulently used your credit. Once you’ve made sure that all accounts are really yours, next be sure that the accounts listed are really reporting accurate information about your payments.
If you have accounts that are in “collections” or have a status of “charge-off” these are the first to pay close attention to. These sort of accounts adversely affect your credit status as do those in the section labeled “Public Information”. You’ll find that the accounts that are specifically being handled by debt collectors (i.e., in collections) may be the easiest to negotiate a settlement with. Depending on what your financial picture is and if you can afford it these debt collectors will usually take pennies on the dollar for a settlement of the debt.
The usual threshold to keep in mind is to keep your maximum debt used under 30% of your maximum available credit. Therefore, if you have credit cards that are maxed out then you should either pay them down or if that’s not possible then try to request the credit limit be increased on them. If the credit card companies agree to increase your available credit then doing so will enhance your debt-to-credit ratio in a favorable way.
Another effective step that can be taken is to seek the help of a relative or good friend who has good credit. Ask that they allow you to be added to one of their credit card accounts. When your name is placed on that persons’ credit card account then you benefit from their good credit history, your credit score raises, and it make you look more stable financially.
The task of repairing credit is certainly not easy. But it is certainly worth the effort particularly now with the economy being as it is. There is also a learning curve with respect to understanding all relevant laws for cleaning your credit because there are many federal and state statutes. Nonetheless, where there is a will there is a way by staying focused and consistent and over time you will see negatively reported items being changed to positive.