Good Ways to Repair Your Bad Credit
The old formula to build better credit went something like this: apply for a few credit cards, use them for affordable purchases such as groceries, utilities or gas; and then pay them off completely when the statement arrives each month, to show the bank that you can manage your credit responsibly.
In today’s world, that old advice needs to be updated. Try these ideas:
Like an annual medical checkup, make sure your credit report is in good shape.Once a year, all consumers are entitled to a free credit report. We recommend logging onto www.annualcreditreport.com and getting yours there, as the report you’ll receive is comprehensive and generally more reliable than those companies that like to advertise such things on television. A credit report is your “resume” for banks and other creditors to review when considering how much credit to extend to you. The report includes both good and bad information, but also can hurt you by including old, outdated, disputed, or inaccurate information. Make sure to check for accuracy too. If you find errors, it is vital to dispute the item with the reporting credit bureau(s) immediately. This can have the positive impact of increasing your credit score, making you a more attractive consumer to creditors and make it much cheaper to borrow money.
Schedule payments through online banking or set alarms on your cell phone to remind you when payments are due. About a third of your credit score is comprised ofwhen payments are made. Your payment history is important, making it a good idea to schedule recurrent bills on “auto-pay” using your online banking profile with your bank. As to one-time bills which are not recurrent, set up reminders on your cell phone to make sure they are not forgotten. Doing both makesa tremendous difference on your credit score!
Think outside the box. Another way to keep a credit score moving in the right direction is by being vigilant about what is reported and taking the time to dispute chargesthat are not accurate or not owed.A dispute in writing requires the credit reporting agency to respond properly and do an investigation. If your position is correct, the item must be removed from your report, and if not, permits legal action to be pursued to force removal, along with the recovery of damages. If correcting inaccuracies is too difficult or time consuming for you to do yourself, enlist the help of a consumer attorney who specializes in Fair Debt Collection Practices (FDCPA) and Fair Credit Reporting Act (FCRA) cases, as mistakes are made and they can be costly to you.
Fight with debt collectors if you are right. If a debt collector is violating your FDCPA rights, an experienced consumer attorney can help, and can win you a statutory award of up to $1,000. Better still, they can represent you for free, by requiring the debt collector to pay all attorney fees and costs as required by law.
Whether you follow any of the above suggestions, remember that your good credit can often make the difference in being approved at reasonable rates, It is worth the effort!