Can I Fix My Credit?
Your credit score measures your creditworthiness. Credit companies check your credit score to know if you are eligible for credit or not. Even if they confirm that you are eligible for a credit, they will determine the interest rate based on your credit score. If you have a high credit score, you can access credit with a low interest rate. People with good credit scores also have access to more credit facilities than people with bad credit scores. It is, therefore, important to have and maintain a high credit score. Even if you do not have a good credit score, you can fix your credit score.
There are many methods to use when you want to fix your credit. You can either contact a credit repair company to help you out or you can do it yourself. If you decide to do it yourself, you will need to discipline yourself to achieve your desired result. This is because you need to adjust your lifestyle in the process of repairing your credit.
The first step in repairing your credit is to check your credit report and your credit score. When you know your exact credit score, you will know the measures to take to fix it. When you check your credit report, you should confirm that there are no errors in your report. Make sure that all payments you have made are reported with the accurate payment date. You should also confirm that there are no wrong accounts on your report. You should also confirm that all accounts that are supposed to be removed from your account have been removed. For instance, bankruptcy should stay on your account for 7 years (some 10 years). When the period elapses, the company should delete it from your account. You should also check if the accurate credit limit is reported on your report.
- Filing a dispute
If you spot any of these errors or any discrepancies, you should file a dispute. There are three methods to file a dispute. You can file the dispute online. The online process is simple, but there are some limitations. You will have to complete the process by sending a mail after filing the dispute online. When you file a dispute, you can visit the website of that particular credit bureau (Equifax, TransUnion, or Experian) and then submit the dispute. You may be required to mail the necessary document.
- By Mail
The process of submitting credit report dispute by mail takes time. You will need to write a letter to the credit bureau explaining the reason for filing the dispute. You will need to detail the nature of the dispute and the information that needs to be removed. You should also attach all relevant documents including the proof of the error. You are required to mail them to the credit bureau. The credit bureau is required to respond within 30 days. That is after investigation the issue. However, it can last up to 45 days if they need to request additional documents. You should track the time after submitting the dispute. If the bureau does not respond within the stipulated time, you can sue them at any federal court.
- On Phone
You can also begin the dispute by calling that credit bureau on phone. Usually, you will find a contact number on the credit report. You can call that number to file your dispute. You can also call Equifax on 1-866-349-5191, TransUnion on 1-800-916-8800, or Experian on 1-888-397-3742. When you call them, you should keep a record of every information they share over the phone. You will be required to mail the necessary documents to them. You can mail to the following addresses for all three credit reporting companies.
P.O. Box 740256
Atlanta, GA 30374Experian
P.O. Box 4500
Allen, TX 75013
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016.
After filing the dispute, you will need to wait for the company to respond to your claims. The credit bureau usually sends a report after they complete the investigations. They begin the investigation by forwarding the data you sent to them to the original information provider. The information provider will then investigate the issue and send feedback to the credit bureau. If the information proves that the information in your report is indeed inaccurate, they will send the proof to the credit bureau. The credit bureau will then effect changes on your report. If the information is accurate then there will be no changes in your report. The credit bureau will offer you a free copy of the credit report with the corrections. You can also ask the reporting company to forward the report along with the changes to all companies or organizations that accessed your report within the last six months. Your credit score will improve once the changes are effected.
- Make prompt payments
Another important step you should take to fix your credit is to make prompt payments. Late payments can affect your credit and if you want to repair your credit, you should start paying your debts on time. If you will have problems keeping track of the payment date, you can subscribe for online reminders. Most banks offer this service and you will be reminded through text or email. You can also set up automatic debits from your account. In this case, the money will be deducted once you enough cash in your account on the due date. Making prompt payments will also help you to reduce the amount you owe.
- Stop accumulating debt
Another thing is to stop accumulating more debt. This can be quite difficult but it will work if you are determined. You can stop using your credit cards and alter your lifestyle a little bit. Keep most of your cards at home to help you resist the temptation of overspending. However, you can make little purchases with your card once in a while to keep the card active. Cut down on your trips to that luxury restaurant and avoid impulse buying. When you stop accumulating more debt, you will be able to clear your debt faster, thereby, improving your credit history.
- Go for credit counseling
If you are having a hard time paying off your debts, you should contact a credit counselor to help you out. In most cases, they will recommend that you consolidate your loan. Consolidating your loan will put all your loans together to make one loan. You will then pay this loan at a lower interest rate. When you consolidate your loan, it is easier to keep track of the loan payments. You will also undergo credit counseling to help you to manage your debts well. credit counseling will also help you to avoid accumulating more debt. It will also help you to effectively plan your finances.
- Reduce your account balance
Another important step to take is to reduce your account balance. One of the things that affect your credit score is your credit utilization ratio. The credit utilization ratio measures the percentage of your credit limit that has been used. This ratio is calculated by dividing your account balance by your credit limit. High account balance hurts your credit score in the sense that it lowers your credit utilization ratio. High credit utilization ratio is good for your credit score. Avoid maxing your credit cards and endeavor to pay off all your balances to improve your credit utilization ratio.
- Get someone with little or no balance
You can also benefit from the account of someone with little or no account balance, someone with a good credit score. It should be someone you can trust as well. Usually, people do this with their spouses or trusted relatives. You can tell the person to add you as an authorized user to their account. When the person adds you, you will benefit from the person’s account balance. This will help improve your score. It is important to choose someone who you know will not make mistakes that will affect you. For instance, if the person makes late payments or misses payments altogether, it will affect your credit score.
Repairing your credit takes time. You may not see the results from the onset but you need to continue the process. When you finally succeed in repairing your credit, you should make a conscious effort not to reduce your credit score again. It is advisable that you maintain a part of the current lifestyle that helped you to repair your credit. This will help you to maintain good credit always.