subject: How to Fix Bad Credit [print this page] A bad credit can cause various complications in life, such as approvals of loan applications, service deposits, and even employment. Public entities and companies use credit reporting services to measure the trustworthiness of the individual. The number that represents your credit is mostly determined by large calculating companies as FICO, and is directly comparable to other candidates for a loan approval or employment. Thus, it is important to know your current credit situation, as it can greatly influence the advantages and disadvantages that may arise in society. Largely speaking, there are two routes that a person can take to fix bad credit: To fix your credit by yourself or seek for a professional credit repair company.
The first way to fix bad credit is by utilizing available tools to dispute the credit score through self effort. All consumers are entitled to a free credit report (credit scores are not included) from the major three credit bureaus once per year. It is important to receive all three reports as creditors typically report to one credit bureau, and the bureaus do not share information among one another. With the credit report in hand, you need to fix your credit by paying the past due accounts that have been reported. Also, by law, you may update or dispute any inaccurate or out of date account information. All of these things, however, take time, and most cases you will need to learn about various legal issues related to credit reporting to fix your credit.
The second method is to fix bad credit through a professional credit repair service. There are numerous companies that specialize in improving credit scores for consumer at a certain cost. One important aspect to understand is that many large credit repairing companies typically use automated computer systems to fix your credit. These companies charge much less than more customized and effective companies, but have weaker results. Unique and personalized dispute letters are much more effective than automated template letters. Thus, it is important to seek out for effective credit repair companies that can fix bad credit by contacting not only credit bureaus but also creditors, collection agencies, and even courthouses.
As consumers, debtors are protected by the Fair Credit Reporting Act (FCRA). Any inaccurate or outdated information on past due accounts can be effectively removed from your credit report which will fix your credit score. Any unverifiable account can also be deleted from the report. The Government Accountability office agrees that more than 70% information on credit reports have errors. Just this fact alone should encourage people with even moderate credit scores to fix bad credit.
Improving your credit score can significantly help open doors in your life. Not only does your credit report and score affect future loans and job opportunities, but it also influences the current situation. A higher credit score can lower interest rates on the vehicle loan you currently have, and also may help you achieve more opportunities at work (promotions). There is a high probability that information on your credit report has errors, and it will be beneficial to find out about how you can effectively fix your credit.
