Easy Ways To Rebuild Your Credit
It is completely possible to fix your credit and to do it fast
. If you have ever been turned down for a loan or even insurance that you needed very badly then you have more then likely uttered these words to yourself.
But you are probably very confused and clueless about whats involved in fixing your credit and doing credit repair. The first thing that needs to be done before you can start to improve your credit is find out exactly why your FICO scores are low.
The only way that you can do this is to get a copy of your credit report and review it for errors and negative information that will cause your credit scores to drop. When looking over your credit report you want to look first for errors.
Errors on your report are accounts that have information that is not accurate. It could be that a late payment is recorded when there never was a late payment, or even the limit is showing wrong and the report thinks that your balance is way over your limit.
Derogatory information is information that is negative in nature and true. This information is often late payments, charged of accounts, collections, judgments and bankruptcies. All of these will pull your credit score down fast.
First make a list of these accounts so they are separated from your good accounts. Make sure that you arrange these accounts so that the oldest account is listed first and the newest is listed last.
Next You will need to write a credit dispute letter for the first two accounts to each credit bureau that is reporting negative information on this account. This is important because there are three bureaus and they all report differently so you want to make sure that you are not sending a dispute letter to a bureau that is not reporting negatively about you!
If you are confused by this, most self credit repair kits cover this process quite well so having one will help you tremendously. This letter is basically telling the bureaus that you do not agree with the information they are reporting. The credit dispute letter that you are writing should have your account number, your name, address and social security number.
You also need to state the reason you do not agree with the account information. Once your letter is received the bureaus under Federal Law must investigate this information with the original lender. If the original lender does not or will not provide proof of the information then the bureaus must remove the item.
Once the negative item is removed from your report your scores should increase and your credit should be fixed a little bit. It is one thing to fix the problems on your credit report but another to actually rebuild your credit. Credit cards are considered revolving accounts for the purposes of calculating your credit score.
Each month the status of your account is reported to the credit bureaus as either on time or late. If you do not carry a balance, or even charge anything to your credit card, you are reported as being on time with your account, which can provide a significant boost to your credit history.
In addition, credit cards increase your available balance. This is important because your credit score is increased when you are using a smaller percentage of your available credit. If you can avoid the temptation to use your credit card for unnecessary purchases, you are better off leaving the account open because it will increase the length of your credit history as well.
If you were to pay for your everyday purchases in cash rather than with a credit card, there would be no record of how well you were handling your debts. A credit card is not the only way to rebuild your credit history. If you have other loan products like mortgages, auto loans or student loans, they will also be reported to the credit bureau each month.
You can also improve your credit history by paying down the amounts that you owe on these accounts. However, these loans are categorized as installment loans rather than revolving lines of credit so you will not maximize your points from the types of credit used category.
Your credit history will also improve if you do not apply for any new lines of credit. Each time your credit report is pulled by a lender, an inquiry is noted on your credit history and remains for two years. The more loans that you apply for, the lower your credit score. If you limit the inquires, your score will increase.
by: Ronald Pedactor
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