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[F378]Fix Your Credit Report

by Jay Peters, Jay

Let's start at the beginning. Your credit report is basically your credit history. The three major credit bureaus write up your report based on information they get about you from companies that gave you credit in the past. Negative information would include late payments on your bills, or worse yet, a foreclosure on a home.

The credit bureaus also generate a score based on the information in your credit report. The credit score, sometimes called a FICO score, ranges from 300 to 850. You want your score to be well above 620; that's a drawing line for creditors. Below that and you'll be paying more interest on car loans, home mortgages, and even insurance premiums.

You may be one of the tens of thousands of Americans who took out a sub-prime or adjustable rate mortgage to buy a home in the past few years. Heads up! You may be in for a shock when your interest rate re-sets. It's possible your new monthly payments will be considerably higher.

These are all good reasons to fix your credit report now. Here's how:

Action #1: Get a copy of your three credit reports. You have to find out what your lenders already know. You have a right to a free copy of each of your three reports once a year. Go to annualcreditreport.com to get them. This site is sponsored by the credit bureaus themselves. Beware: other sites with slightly different names will try to sell you services you probably don't need.

Action #2: Review and remove. Carefully review your credit report for inaccurate information, and go through the process to have it removed from your file. You may also contest negative information.

Action #3: Reduce your debt. Try very hard to reduce the amount of total debt you are currently carrying from credit cards and car loans. Save money wherever you can, and apply that extra cash to paying down your debt. Here's a tip: Don't entirely pay off your credit card balances, though. Potential new lenders like to see a reasonable balance on your cards; it shows that you can handle debt well.

Action #4: Pay your bills on time. Be very careful to avoid "late-pays" from this point forward. Just one delinquent payment can set back your entire credit repair effort.

When should you start fixing your credit report? Right now! It will take a period of months before your actions start to make an impact on your credit score, so don't delay. And if you're thinking about buying a home, allow at least a year to work on your credit report. That will provide enough time to correct mistakes in your report, and establish a good track record for making payments and trimming your debt.

Living with bad credit is stressful but if you want to fix your credit report, there are several steps you can take. First, think positively about the solutions to your money problems – do not dwell on past failures and current debt. Then take the necessary actions to achieve a healthy credit report.

Here are some tips on how to fix your credit report. First, request a copy of your report from a credit bureau (it's free) and promptly correct any errors you find in it. You wouldn't want to be denied that job promotion or that loan application because of a simple inaccuracy in your report! When you discover a mistake, write to the bureau and ask them to fix it. You should examine your report at least once a year.

If there are bad marks on your credit report, due to outstanding debts, then repay those debts immediately. The debts with the highest interest should be your first concern. If you find your money troubles to be too great, then turn to a non-profit credit-counseling organization. A counselor can help you develop a debt-consolidation plan and even be a liaison between you and your creditors, negotiating debt reduction. You may be able to reduce monthly payments by as much as 40%.

Also, limit the number of credit card accounts you have. Only maintain the ones that are absolutely necessary. If you eventually develop a healthy credit history, you can take on more accounts if you wish, but even those with a high income will find that multiple accounts are a financial burden and end up trapping them in a nightmare of debt. It's also important to preserve your total accessible credit on these accounts and to be aware of how much credit you have used so far.

On that same note, do not open multiple accounts at the same time – that will just set you up for an irresistible cycle of debt. The rule of thumb is: don't open up credit accounts that are unnecessary. Usually, they will end up costing more than you would've originally spent if you'd never requested the credit in the first place. Furthermore, don't think that closing an account will fix your problems. This will not fix your credit report. Taking the above steps to repair your credit score is the best coarse of action and you can do it.

Article Source : Pg. 11

About Author

Both Jay Peters & Stu Pearson 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.

Jay Peters has sinced written about articles on various topics from Bad Credit Loans, Free Credit Report Score and Credit Counseling. To learn the inside secrets to fixing your credit fast, visit the author's website: . Jay Peters's top article generates over 40500 views. to your Favourites.

Stu Pearson has sinced written about articles on various topics from Computers and The Internet, Shopping and Finances. Stu Pearson has an interest in Business & Technology related topics. To access more information on or on. Stu Pearson's top article generates over 165000 views. to your Favourites.