Nowadays, with identity theft rampant and possibility of data entry errors it is a high probability that your credit report contains entries that do not belong to you. Incorrect items on your credit report will negatively impact your overall credit score which in turn will cost you thousands of dollars of interest when you get loans for your car or house. The better your credit score, the more favorable interest rates you will receive from the banks and lenders, which means direct savings to you. So credit repair is a good option.
Why is my credit score so important?
Banks, lenders and credit card issuers use the credit score as a universal means of assessing your credit risk and credit worthiness. The credit score is calculated by the three major credit reporting bureaus (TransUnion, Experian and Equifax), and is a reflection of several factors, including your past payment history, on time payment record, amount of loans you have, etc. When your credit score is high, lenders are willing to issue loans to you at lower interest rates. And the lower the interest rate, less money you will pay in interest on your loan. On a big purchase like a car or a house, relatively small reductions in interest rate could mean thousands of dollars in savings to you. In addition, some people with excellent credit scores can even qualify for a no money down mortgages.
Why do-it myself?
Hiring a reputable credit counseling company to assist you to improve your credit report could cost you upwards of $1,500. However, there are many firms that make big claims but do nothing to help you. Hundreds of thousands of dollars in fees are lost each year by consumers choosing the wrong credit counseling company. For a substantial fee, these credit counseling companies claim the ability to repair your credit with a snap of a finger. Unfortunately, many of these companies are a fraud or shaky reputation at best - they do nothing to improve your credit report and disappear with your money. The Federal Trade Commission (FTC) puts out a brochure titled, "Consumer Tips: Self Help May Be Best". In that article FTC strongly recommends that consumers not take the risk of hiring someone and save their money. They further suggest that consumers educate themselves with the repair process and take the responsibility of repairing their credit into their own hands.
Your credit history is what you will be judged by for your entire adult life. It is your credit history that will determine whether or not you get a loan for a new home, whether or not you will get financing for a new car, and whether or not you can rent an apartment. Your credit history will also determine whether or not you will be approved for future lines of credit, whether they are from a credit card or a doctor's office. Your credit history determines whether or not you will have to pay a deposit when you get a new cell phone and it is even what will determine whether or not the utility companies will let you install services. Sometimes your credit history will be the deciding factor in whether or not you are hired for a job. You've been told this since the day you signed up for your first credit card and in spite of this; you now need to know how to repair your credit history.
Perhaps you have discovered errors on your credit report or you've gotten a bill for a credit card you don't remember signing up for. Or, maybe, you had a financially irresponsible youth. Debt accumulates for many reasons and there is no reason to be ashamed of it-or the fact that you need to repair your credit history. Most people do. Credit reporting agencies are not accurate, and most people have found mistakes in their credit reports.
The first step if you want to repair your credit history is to get a copy of your current credit report and notify the credit reporting agencies of any mistakes you find. You will want to check your credit report every three months until you completely repair your credit history and even then, you will still want to check it at least once or twice a year.
Next you will want to validate your debt. Ask all of the companies claiming that you owe them money to send you proof of your debt with them. This request must be done in writing and the companies have thirty days to reply. If the companies fail to reply or to supply you with sufficient proof of your debt, they are required by law to delete you from their system and the credit reporting agencies are required to delete the account from your history.
Once you know, for sure, how much you owe; you must begin to pay it off. Pay off the smaller bills and make payments on the rest. Make sure to make all of your monthly payments on time or even early. Most companies are more than happy to work with you when they know that you are serious about paying off your debt.
In fact, the best way to repair your credit history is to slowly replace the dubiousness with steadfastness and responsibility. You can do this by not missing a single payment from now on. Tip #1
Stay on top of your credit report. Most credit reports contain errors. Make sure you check your credit report every year (you get one free credit report every twelve months) and if there are errors make sure to challenge them with the reporting credit agency. Credit agencies are required to investigate each and every challenge that gets reported.
Both Rockmond Dunbar & Steven Magill are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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