Wednesday, December 8, 2010

Steps to follow when repairing credit yourself

Guest Post by Sharleen
Steps to follow when repairing credit yourself

A credit history is a record of your past borrowings and repayments. It contains information about all your late payments as well as bankruptcy. Your credit score is a three digit number that provides your potential lenders a rough idea of how likely you are to pay your bills. Your credit score could get affected due to late payments or write offs or bankruptcy. A large amount of outstanding debts could also be the reason for your low credit. When you work actively to make sure that your credit report is accurate and up to date, then that is called credit repair. Credit repair is important, as without a good credit score you may be denied credit, insurance and even employment. You may opt for consumer credit counseling to help you improve your credit. You could do it yourself or hire the services of an attorney. Hiring an attorney would be expensive so it is best that you do it yourself.  

The steps that you can consider when repairing credit yourself are as follows :

1. Get hold of your credit reports: Order for your credit reports from the three main credit bureaus- Equifax, TransUnion and Experian. You may see that the credit reports from these 3 bureaus are not similar to each other. This is because your creditors do not report to all the three. If you have been denied insurance, credit or employment due to your credit score, then you are entitled to get a free copy of your credit report.  

2. Scrutinize your reports in detail: After you receive your credit reports go through them thoroughly. In most cases you will find at least one error in your credit report. This may be because the bureaus give the information that they get from creditors. They do not verify it. These errors may include typing errors, wrong information and also inaccurate account history.  

3. Dispute the errors: If you feel that there is any incorrect information on your credit report, then you have the full rights to dispute that information. You must write a letter to the credit bureau and along with the letter send a copy of your credit report. Make sure that every inaccurate information and mistake is highlighted in the copy of the credit report that you send. You must keep copies of all the letters, forms and documents that you send to the credit bureaus.  

4. Resolve the negative items: Your credit score is drastically affected by your payment history. So the best way to improve your credit history is to pay all your past due accounts. Try to pay the ones that are charged off and also ensure that the other accounts do not get charged off. 

These are the few steps that you need to follow when repairing your credit. After you have resolved the negative items on your credit you should also try and get some positive items added.

This guest post is written by Sharleen Benet. Her deliberate writings include personal budgeting, personal finance management, process of coming out of credit card debt. She is a financial writer by profession and has specialization in dealing with financial problems and its solutions.

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