Tips to Repair Your Credit

Financial professionals in the UK commonly recommend that consumers review their credit report periodically. Because of the ease with which you can obtain your credit report online, reviewing information in your credit file is a simple process. Of course, though, keeping track of credit report information does not necessarily equate to having a healthy credit score. If your score is lower than you would like it to be, you will need to develop a strategic plan to improve your creditworthiness. Although improving your score won’t happen overnight, you will likely see gradual improvement that will increase your ability to qualify for loans and credit cards.

Take note of derogatory information. If you make a credit payment after its due date, this information will be recorded in your credit file. Similarly, you will incur negative entries if a creditor closes an account because of poor payment history. Other types of entries, such as bankruptcies and judgments, can also severely impact your creditworthiness.

You will not likely be able to have a legitimate negative entry removed from your credit file. Still, it is important to establish a baseline you can work from. As negative entries age, they will have a less dramatic impact on your credit score. For example, if you missed a credit card payment last month, your score might drop by 100 points or more. A missed payment entry that is three years old, conversely, will probably not reduce your score by more than 10 points.

Look for information recorded in error. Erroneous information can artificially lower your credit score and prevent you from obtaining loans or other forms of credit. For example, suppose that you paid off a credit card balance two years ago but the account is listed as in default. You would still suffer the financial consequences of the erroneous entry even though you paid the account in full.

If you discover erroneous information, file a dispute with each credit bureau that includes the error in its files. You can find instructions for disputing an entry on each bureau’s website. After receiving the dispute, the bureau will investigate your claim and remove the error if appropriate. You can increase your chances of a successful dispute by including supporting documents with your dispute request. Using the example above, you could include an account statement showing that the account balance was paid in full and a bank statement showing the payment to the account.

Leave your credit cards at home. Your credit account balances significantly affect your creditworthiness, particularly if your balances are high in relation to your available credit limits. Continuing to use your cards will make it difficult to pay down your balances and improve your credit score. Instead of using credit cards for everyday or discretionary purchases, you can use a debit card that withdraws funds for purchases from your bank account. If you do not have the funds available for a discretionary purchase, you will simply need to delay the purchase until you can afford it without tapping into your available credit. Leaving your credit cards at home can go a long way toward helping you re-establish a high credit score.

Close unused accounts. When you pay off a credit card or line of credit, you might be tempted to leave the account open for additional purchases or financial emergencies. It is important to remember, though, that open credit lines can negatively impact your score. Potential lenders might assume that you will use open credit lines and might be unable to make your payments in the future. Ideally, you should have no more than one or two unsecured credit lines open at any given time.

Improving your credit score requires patience and discipline. You will need to develop a strategic plan in order to reverse any damage you have caused to your creditworthiness. Also, you can expect your credit score to take years to recover, particularly if you carry high unsecured debt balances. A financial adviser or debt management professional might be able to help you develop a plan to improve your score without straining your personal budget. Of course, periodically obtaining your credit report online will also help keep you motivated by showing you the progress you have made.

How Can You Judge The Credit Repair Company’s Intentions?

If you are worried about your credit history going bad, you can either choose to do it yourself or have the job done for you by a credit repair company. What you should know is that there is no shortcut for fixing your credit history. It requires time and effort and there is no one who can change your credit history, it is illegal! But there are ways in which you can solve this legally.This is the reason why people go for professionals in credit repair to do the job for them.

These professionals are well versed with the various provisions on bad credit history, bankruptcy or bad loans and can help you sort out your credit problems smoothly and in a legit way. However, the trick comes when trying to select a credit repair scam from a genuine company.

So, how can you identify the credit repair scams? Some situation in life make a person desperate for help. Having a bad credit history is one of them. For this reason you can easily fall prey to the false claims made by some companies about credit repair and end up spending hundreds of dollars and still have no positive results.

Characteristics of credit repair scams.
Advance payment
*The company will ask for advance payment for credit repair. Always ask for the services first. Payment should be made on the completion of service.

Conceal your right
*The company will never be open about your right in credit repair. They will try to keep you in dark as much as they can. Always do your homework regarding your legal right about credit repair before setting up a meeting with the credit repair company.

Restrict communication
*The company will not allow you to contact the national credit reporting companies. They will always compel you to do the communication through them.

False claims
*The company will claim to get rid of all the bad credit even if it is correct. This cannot be done at all. It is a false claim totally.

New identity
*They will suggest having a fake new credit identity. This is illegal and can lead to much complicated situations.

Suggest dispute
*The company will try to convince you to challenge all the bad credit available in your report.The credit repair is possible, but there is no shortcut to it. It requires effort and planning. The law gives you a chance to mend your history. There are many genuine companies available to help you out. But you have to protect yourself from the credit repair scams. Before taking any decision consider these points. This will surely help in making a correct decision about credit repair company.

The Benefits of a Credit Rating Check

There are many benefits to routinely checking your credit rating. The information contained within your credit report is the key factor in determining your likelihood of receiving credit of any kind. Applying for loans, mortgages, credit cards, and even cell phone contracts are just a few of the financial decisions that take your credit rating into account.

Below are a few of the reasons that it is so important to get a credit rating check.

Ensuring Accuracy on Your Credit Report

One of the most crucial reasons to stay informed of your credit rating is to make sure that all of the information is accurate. Since your credit score directly affects most of the financial aspects of your life, it is very important to make sure that everything is correct.

Clerical errors often occur and you don’t want your credit score reflecting information that could be potentially incorrect. Although there are steps to take in the instance that there has been a mistake, it can take time to get these issues completely resolved.

It is a good habit to double-check all of the information for accuracy every time you get a credit rating check.

Planning for Future Credit

If you are planning on applying for any sort of credit in the near future, it is best to know your score before doing so. Your credit report will often be the only indicator of your financial responsibility, so it is helpful to know what the bank (or other financial institution) is going to see when they check it.

Oftentimes, eligibility, as well as interest rates, are calculated from your credit rating. If you are unsatisfied with your current score, there are many steps you can take to improve it. These steps may take time, but they may also save you a substantial amount of money in the long run.

It is essential to be informed about your credit rating so that you can take the appropriate actions to best handle your credit, both past and future.

Finding Ways to Improve Your Credit

Depending on your personal situation, there are different options and tools available to help you improve your credit. Without knowing your credit rating though, it is impossible to seek out these options or to raise your credit score.

Once you know where your credit stands, you have many options and resources that can be extremely helpful and hopefully save you money in the future.

You will thank yourself down the road when your credit score is higher and you end up saving money on a loan’s interest rate!

It’s Free!

You’re hopefully starting to get an idea of how beneficial a credit rating check can be. On top of the great reasons discussed above, yearly credit checks are absolutely free! There is simply no reason not to do them.

Once a year is the ideal frequency to check on your score and acknowledge any changes that may have occurred. You are legally obligated to a report from each of the three major credit bureaus (Equifax, Experian, and TransUnion), so why not take advantage of this service every 12 months?

It is a great habit to get into and is made available so that you can maintain an informed understanding of your credit rating.

To be financially successful, it is crucial that you understand the way that credit works. It is equally as important to be aware of your own credit rating and how it will affect you. No matter what your score may be, there are always ways to increase it, although you will not be able to do so without first getting a credit rating check.

If handled correctly, you should be able to use credit to your financial advantage. The only way to do so is to inform yourself and make decisions based on your own personal situation. Since the effects of your credit are extremely important in the long-term, it is best to look into a credit rating check as soon as possible.