Fix Your Credit

Raise Your Credit Score

Fix CreditHaving good credit is very important today, especially in this financial environment. Many people are foreclosing on their houses and are not able to make payments on their credit cards. By improving your credit score you can save thousands of dollars, and save your house possibly, just by investing a little time and effort to clear up possible mistakes or errors. Bad credit even affects you insurance policy, it’ true! The reason being is that someone who has bad credit might be inclined to file an insurance claim at the risk of raising their insurance rates as opposed to someone who doesn’t need the money and won’t risk raising the insurance rate. Here is a summary of how you can improve your credit legally.

A lot of consumers have mistakes on their credit reports and they don’t know anything about it. The first thing that must be done is to obtain a credit report. You can do so from one of the three major credit bureaus, Experian, TransUnion, and/or Equifax. There might be other ones but these are the major three. For a small fee, you can obtain a copy. This is important because you need to see what’s on it in order to improve it.

Secondly, after obtaining your credit report go over it meticulously. Look for any information that is irrelevant to you. Such as a wrong name, a wrong address, a wrong social security number. With all of the people in the system, it is very easy to have mix ups. Send a letter to the creditor and ask them to remove it, state your reasons.They have to verify that it is you.

Thirdly, every time you go to buy something, such as a car, the vendor will run a credit check on you and simultaneously will run applications to several banks to see if they will give you the money. They don’t want to waste their time if they can’t give you money. Every time an application is made on your behalf or directly from you and it is turned down, even if they don’t give you money, that denial is posted on your credit application and can be removed by simply seding a letter to the creditor and asking them to remove it. On the flip side, every time a bank or creditor is willing to give you money and approves an application it reflects positively on your credit report. Again, even if there is no exchange of money, just the denial or acceptance of an application goes on that report.

Also, there are certain statutes for debt collection. If you have debts which are older than seven years you can have them removed from your credit report. If you don’t do it no one will voluntarily remove these things except if you hire a credit repair agency. But, if you have the time, you can do it yourself. Check the laws for the state in which the debt exists and find out if they are past the statue of limitations. This applies to charge offs as well. A charge off is when debts are written off as uncollectible. They typically remain on you credit report for seven years. If so, send a letter to that creditor and ask to have them removed.

Do not cancel credit cards. Cancelling credit cards reflects poorly on your credit application and sends a message to potential lenders that you might do the same with them. In fact, the best way to maintain credit, in this crazy world, is to use that credit card and have the discipline to put that money away to pay it at the end of the month. Even if you don’t need it and you have the cash, use the card and pay the card at the end of the month. This can help boost your credit. Maintain a thirty percent balance if you can. It will show responsibility to lenders.

So, in conclusion, these are ways in which your credit is affected. Make sure that what is right is on that report so that you will get the credit for paying that item. And, make sure that what is wrong is not on that report so you won’t have a lower credit score than you deserve. All it takes is knowing what’s on the report and sending a letter to that creditor. They’re not mean people, if something is inaccurate they will take it off. If you’ve sent an application that was turned down, ask, they most likely will take that denial off of your report. They have the burden of proof. They have to verify that the information is accurate. If you didn’t authorize that car dealer to send ten applications, the creditor will understand, and will remove it.

On a side note, cash is better than credit. But, now that we’re in a pickle we need to use credit to boost our credit. We got into this mess because we use credit to loosely. We buy televisions, and radio’s, and car’s, food, clothes, and whatever else with credit, in most cases paying a lot more than what that product was worth. It’s nice to have what we want now, but in the end we’ll be paying two-three times what that product is worth at the moment. If it’s something you can do without wait until you have the cash.

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