Free Credit Repair Advice

Have you ever been denied an auto loan or apartment lease and wondered why? While this could be due to various factors, more than likely it’s because of your credit history. In a sense, your credit actually speaks volumes on who you are. Consider it as a financial report card that has the ability to impact many different aspects of your life. Financial advisors and professional credit counselors both agree that having good credit plays a huge role in leading a life of financial success.

Who Is Looking At Your Credit?

So just who is looking at your credit history? You would be surprised to know that it isn’t only the credit card companies. Landlords, employers and insurance companies may also access this information and often do so. They want to find out about your payment history which will provide insight on your spending habits - both will help them determine if you are a responsible consumer and worth the risk. Any inconsistencies in your payment history typically indicates that you will follow the same pattern in the future.

The Importance of Good Credit

One should never underestimate the importance of having good credit. Demonstrating a consistent payment history and sustaining high scores is sure to come in handy in the future. It doesn’t matter if you want to attend school, finance a vehicle or purchase the home of your dreams, your credit history is what will have a huge impact on whether you receive the funds needed to achieve it.

Maintaining high credit scores is important, but things do happen. Perhaps you missed a single payment or paid your medical bill a few days late - something like this could easily drop your score by as much as 100 points. To be perfectly honest, the credit realm is harsh and shows no leniency. Fortunately, there are a few methods that can be employed to repair your credit. We will leave you with these 10 simple tips:

1. Make your payments on time: The easiest way to get your credit back on track is to pay all or your bills in full and on time. This has a direct impact on the algorithms that calculate your score. So much as a missed or late payment could drop your high score in an instant.

2. Set credit limits for yourself: That high-limit credit card just might be your demise. Try to keep your cards at a max charge level of about 30%. When the bill comes, make sure you pay the balance in full. The ratio in the amount of credit you have compared to how much you actually use is another critical element of the scoring algorithm. Keeping these levels low portrays restraint and most important, responsibility.

3. Limit your number of open accounts: Attempting to juggle multiple accounts will only make things harder, especially since you’re trying to rebuild your credit. This could also prevent you from obtaining valuable accounts or loans as your perceived debt will be much higher.

4. Dispute all negative items: If you feel something on your credit report isn’t right, make your case and fight it to the end. You have the legal right to investigate and the reporting agencies are required to verify all disputed items with the entities that placed them on your credit report. In most cases, if the items are not or cannot be verified within 30 to 45 days, they must be completely removed from your credit report. This one is well worth looking into as nearly 80% of all credit reports have some level of inaccurate data.

5. Use the leveraging method: This technique involves convincing someone with excellent credit to sign you on as an authorized user for one of their credit accounts. You can achieve similar results by having someone cosign a financial loan or apartment lease with you. The algorithms will detect that an individual with great credit has instilled trust in you and in return, accordingly raise your scores.

6. Understand the concept of “closed”: It is important to know that closing or paying off an account does not erase that information from your credit report. However, having a few old, but well managed accounts indicates an extensive history of responsibility.

7. Aim for stability: There is much more to good credit than paying your bills on time. Many lenders will keep an eye on residential and employment information for signs of stability. The longer you stay at one address and one job, the more credit offers you’ll receive over time, thus enabling you to boost your scores.

8. Elude revolving credit: Revolving credit is often referred to as a cycle of continuous credit card debt. People who find themselves in this situation usually have numerous credit cards with high interest rates. Working towards paying off this debt instead of moving around it with different credit accounts can drastically improve your scores.

9. Speak with a professional credit consultant: By talking with an expert you can develop a sound strategy for the future and make the right steps towards raising your scores. Stay away from so-called pros that make the promise of improving your credit in a certain amount of time or by removing negative items. Though it would help, accurate information cannot be removed in such a manner regardless of how damaging it might be.

10. File bankruptcy: This is a last resort of course, but sometimes things get that bad. If your credit is blemished to the point where repairing it seems impossible, filing bankruptcy could be the most viable option. It doesn’t mean that you’re completely broke or going to the poorhouse; sometimes we just need a second chance, a fresh start. Sometimes, bankruptcy is the best move you can make towards repairing your credit.