Understanding How to Repair Your Bad Credit  

The process of fixing bad credit is what is known as “credit repair”. There are many steps & methods that can be used to repair credit score. You can just Google “how to repair bad credit” & a number of options will be there in-front of you, you can choose one from them. Here are some steps that can be followed to repair credits:

Self credit repair

This is when a person decides to do their credit repairs themselves by putting together copies of their credit reports and using them to repair their credit. One has to identify the mistakes they made so as to suffer bad credit and use the mistakes identified in the previous credit reports.

Credit reports are acquired:

*Freely: one is entitled to free credit reports every year.

*If you have gotten the maximum number of  free credit reports, you can get one at a fee.

Review of credit reports

 

After getting the credit reports,one is required to go through them completely. A long credit history will attract a longer credit report with many more pages than one with shorter credit history.

Identifying what to repair

After reading through the credit reports and thoroughly reviewing them, one can then identify what is to be repaired. The reports may contain wrong information, the credit reports given may not belong to the said owner’s account, payments may have been made and not included.

Disputing errors

One has the right to ‘dispute’ the errors that appear in the reports. This may include any inaccurate information or information that is not complete or can’t be verified. Credit report disputes can be done online,through mail or a phone call.

Online credit report dispute is the fastest method but can be hard to verify. This is because there is no signed documents or some physical proof, although one may take screenshots.

The most efficient method is mailing the complaint as it is easier to prove that the report was faulty. You can include proof of payment where necessary. You may even keep a copy of your dispute letter after raising your complaint.

The individual’s payment history reflects on his credit score. One is required to take care of his credit score by ensuring early payments, this is a form of credit repair. This account will be marked as ‘paid’ or ‘current’.

Loan Balances

Loan balances may also affect an individuals credit score, Therefore, you are required to pays your  loans in time as this can help to improve your credit score. This unlike when you pay the loan when it is already overdue.

Prioritized Spending

An individual is required to prioritize how he spends his money,especially with a limited amount of money directed to credit repair each month. Prioritize payment to accounts that are close to being marked past due. After this, make payments to current accounts to decrease credit balances.

New credit

Depending on your credit history, it may be necessary to get new credit. If the individual is suffering bad credit then he or she may have to get new credit as a form of credit repair and ensure to use the new credit account for their redemption in credit history.

The new credit account may not be approved if the applicant is a holder of a ‘charged off’ account. Application may be declined on all the levels available for holding a credit account. If one applies for a major credit card and is denied, he may then apply for a retail store credit which will limit him to use the credit card for services or  purchases in retail.

If both credit cards are denied, he may then apply for a secured credit card. This credit card requires one to make a deposit known as a security deposit, so as to get a credit limit. A secured credit card is more useful than the retail store credit card as it can be used in many places.

File for bankruptcy                                                           

This is the last option in credit repairs. Bankruptcy is filed when an individual is completely unable to clear his credit. He is advised to file for bankruptcy as soon he realizes he will not be able to clear all his credit in due time or redeem his paid off accounts.