Everyone wants to repair their bad credit rating, but there is no quick solution or simple way to repair your financial worthiness overnight. Repairing your credit is a process that is going to take some time, and it requires patience. Credit bureaus maintain your credit reports, and they collect your credit data from banks, creditors and mortgage companies. A credit bureau can report any type of negative credit data for up to seven years. Any bankruptcy you file is reported on your credit report for up to 10 years.
Reports are never erased off your credit record. Having a poor repayment history, even if it is brought on because of loss of job or medical illnesses, can be corrected over a period of time.
Having a derogatory history can have a negative effect on you today and in the future. If you need money for an emergency, your bad track record of making payments could make the loan process more difficult. The consumers in the world today, are looking for ways to repair their bad credit history. If you want to begin repairing yours, below are some of the ways you can start the process.
The first step to repairing your credit report is to start checking into the reasons why a creditor has reported you to be in a poor standing. Talk to your creditors, and see if there are adjustments or corrections that need to be made on your credit file.
The next step is to start paying your bills before or on time every single month. Paying your bills on time will begin to show positive effects on your credit history.
You should only maintain a few credit cards. If you are having difficulty paying them, ask the creditors to close your accounts. After your accounts are closed, report these changes to all the credit agencies so that they update the changes as soon as possible. Because there are so many incidents today where your personal information or credit cards are stolen, make sure your card information is secure so that you won't be a victim of financial fraud. If any of your cards are stolen, immediately report this to your credit company. They can immediately confirm if any transactions have been processed on your account.
It is important to prevent any tax liens because you were not able to pay federal or state income taxes. You also want to prevent any bankruptcies
from being filed on your credit report. A bankruptcy will be recorded on your credit report for up to 10 years. A tax lien will be recorded on your file for seven years.
You can ask to have a reduction in your credit limit on any of your accounts. When you do this, it will lower your available credit and borrowings, which will help improve your credit rating.
Ask a family member or close friend to be a co-signer on a small loan or credit card to help re-establish your credit rating. Always pay this on time no matter what! Remember that your family member or friend's credit will be affected if you don't make your payments on time.
Be careful about the credit card you choose. You want to choose one that will work in your favor to rebuild your credit. Set aside a specific amount of money to keep it in your account so that you have the money when the bill comes in to pay the charges you made.
Every year, request to have copies of your credit report sent to you. Examine the reports very carefully to be sure they are error free. Make sure there is nothing fraudulent on the report or anything that is questionable. Make sure there are no charges that have been duplicated.
If the credit reports are error free, you need to try to resolve the problem of your bad financial history by negotiating with your debtors for an agreeable payment plan. Once you come to an agreement on a new payment plan, you have to follow it precisely to restore your credit rating back to good standing. If you fail to do so, this will be added to your bad history.
If you have faced some unforeseen circumstances in your life such as medical problems, divorce or job loss that has caused you to miss or make late payments on your bills, you want to correct this. These late payments were probably recorded on your credit report. To repair this, contact all your creditors and tell them about your circumstances that caused this to happen. Request that they make an adjustment to your payment plan, and see if they will take off the derogatory rating once you have paid the balance on the bill.
Once you have established a less than perfect rating, speaking directly to your creditors can be the best way to correct it.