Time and chance happens to everyone, but the credit report will be the constant reminder of the bad times.
Unfortunately, in a downtrodden economy, it is not unlikely for people to have
blemishes on their credit. However; these imperfections can impact the ability to purchase a home, a vehicle or even acquire employment. Thankfully, there are ways to repair one’s credit that allow you to be in the good graces of the lenders when it comes time to make a purchase.
There are four simple ways to repair and restore credit properly. From credit inquiries to having credit cards that are maxed out, these situations all affect the FICO score and the ability to obtain a loan. It does not cost hundreds of dollars and there is no need for an outside firm. A person can take the intial steps to cleaning up their own credit, but it takes time and dedication. It is not an easy job to clean up a credit report. Remember, it took a while for the credit report to be in the condition it is in
and it is not going to magically be perfected overnight. Here are the ways to begin the daunting task of credit cleanup.
Clean Up The Errors:
For starters, those that are attempting to repair their credit report need to obtain a copy of their report. It is often the case that there is incorrect information that can be dragging down
your score. Correcting all errors is a good way to start the cleanup process. An individual is
entitled to one free credit report each year from all the three reporting agencies.
Pay Off High Balance Cards:
One of the easiest ways to repair a less than stellar credit report is to pay off or lower the
balance to all credit cards. The credit cards should never be above thirty six percent of the total
credit line. By doing this, a person can obtain the maximum allotment of points on the FICO
score for these cards. Transferring balances around may help as well, especially if there are
cards that have room left on them. Most lenders like to see balances at thirty six percent or
below to be within comfortable ranges for lending. Also, the FICO score can jump as much as
fifty points just by paying down credit card balances.
Stop Buying On Credit:
While in the repairing process it is important not to create any new debt. The more debt that is
created will mean a higher debt ratio and can have a negative impact on the FICO. Each new
credit account that is opened will require a person to have a credit inquiry. While it is tempting
to take these offers that come in the mail for credit cards with high interest rates and store
accounts, refrain from pursuing them.
Negotiate With The Creditor:
If there is a bill that is dragging down the credit report call the creditor. Creditors want their
money and they also love people who are willing to take responsibility. They may be willing to
work out a settlement offer to get the account re-aged and paid off.
Doing some of these steps will show improvement within the next credit reporting month. A
credit report will take a little while to get back into the lenders good graces, but the hard work
will definitely pay off when the FICO is in prime lending range.
This has been a guest post by The Credit Geeks, helping thousands of customers improve their credit scores for years.