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How to Repair Bad Credit
Follow Our Step by Step Instructions and Get Started Repairing Your Credit
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As long as you know where to start, the process of how to repair bad credit doesn’t have to be a complicated one.
You can have bad credit for a variety of reasons. Maybe credit bureaus have collected wrong information about you,
recorded it on your credit report thus hurting your credit report and history.
Or maybe you have just used poor judgment in the past by getting yourself into too much debt or not paying bills on time. Now there are some companies out there like EMS that will work with startup businesses.
Either way, repairing bad credit may be a long journey for some, but it is definitely possible and not as difficult as it may seem.
Checklist for How to Repair Bad Credit
1) Check for errors The first thing you should do is order a copy of
your free credit report. You need to be able to see exactly what needs to be fixed
and viewing your credit report is the only way to do it.
Request it from all 3 credit agencies: Equifax, Experian and Transunion.
These reports may be requested free of charge annually. After you get your hands on your credit report, check to make sure that everything is correct.
If an error has been made, then you must file a dispute.
Write to the credit agency with details of the error. Once they review it, they will correct it.
This may take some time and patience, but it must be taken care of in order to repair your credit.
2) Close accounts If there are any unused credit cards on your report, have those accounts closed immediately.
You can do this by submitting a letter to each credit card company or business requesting that they close that particular account.
Your credit report can be affected negatively when you have a surplus of open credit cards even though they may have a zero balance.
The loan companies or any other entity that is reviewing your credit report, will see any open credit cards or accounts
as future debt just waiting to happen. Get them closed and your credit rating will improve.
3) Pay off Delinquencies
Take care of any late payments or any outstanding judgments immediately.
Delinquent payments have the biggest affect on your credit score because
your payment history accounts for 35% of your FICO score.
4) Negotiate
Negotiate with debt collectors or creditors into removing charge-offs and
collection accounts from your credit report. Sometimes all it takes is to ask and getting these items removed will greatly improve your score.
5) High Low Limits
The amount of your credit card debt should be lower than 30% of your credit limit.
If your credit report shows that your ratio of credit balance to credit limit is above 30%,
it will negatively affect your credit rating. Work on paying off your highest balances first,
and gradually bring your other balances down to below that 30% mark as well.
Your level of debt accounts for 30% of your FICO score, so it’s important to keep this ratio in check.
6)Wait it out
And last of all, just wait it out. If you have a negative ‘ding’ on your credit report,
it will fall off in 7 years. Bankruptcies take a little longer but eventually will disappear after 10 years.
If you’re one of the many wondering just how to repair bad credit, follow these simple tips and you’ll be on your
way to better credit in no time.
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