Quick Credit Repair - 5 Steps To Do It Right

With everything from jobs to buying a home contingent on a good credit score

, it's imperative that you find a way to achieve quick credit repair. If your credit is bad you'll pay more for just about everything. You're car insurance premiums are based on your credit score, your ability to rent an apartment is based on your credit score and even getting a certain job may hinge on your credit score. Having a good credit score is important for more than just getting a credit card or a car loan.

"Quick" is a relative term. It will take longer for some than others to repair the damage to their credit. For most people who only have a slight ding or two, they can see dramatic improvement in as little as a month, for others it could take six to eight months or more to see any significant improvement. The thing you should take away from this article is that the sooner you start the process, the sooner you'll see results.

Follow these steps and start today to repairing your good credit name:

1. First things first, by law you are allowed one free copy of your credit report from all three credit bureaus once a year. Get your credit reports, all three. Examine each one carefully for mistakes. You may be taking a hit on your credit score for things that aren't even accurate. If you find inaccuracies report it immediately, in writing, to the credit bureau. They have to take action within 30 to 45 days by law.

2. Get your actual credit score, the number that rates your credit worthiness. This is called a FICO score. You can get it from www.MYFICO.com or from Equifax credit bureau. The other two credit bureaus have their version of a FICO score but they calculate the number differently so it can vary wildly. Rely only on the score that the banks and credit unions rely on. Equifax is the only bureau to use the FICO score.

3. Obviously if you have a history of late and slow payments now is the time to take care of business. Make all your payments on time, even early. If you are strapped for cash and just don't have enough money to pay everything on time you will either have to cut your expenses to free up some money or find ways to make more money. You can talk to your boss about a raise, find a new job, or maybe even (yuck) get a second job. Whatever you can do to improve your cash flow so that you can make all your payments on time.

4. The banks will not only look at your credit score they will also consider your debt ratio: how much debt you have in relation to your total monthly income. For example, if you bring home $2,400 a month and you have $1,200 in debt you are spending half of your income on paying on credit cards, home loans, car loans, etc. Most banks like to see your ratio closer to 30% than 50%. Try to pay off some of your credit card debt to free up your debt ratio.

The worse your credit is the more dedicated effort it will take to get things straightened out. Quick credit repair is possible but in a lot of cases it will mean that you have to make some sacrifices in the short term to get where you want to be in the long term.

by: Robert Carleton

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