Key Tips To Repair Bad Credit History
Bad credit history is just what it is, history. It’s over and done with and can’t be erased. But it can be repaired or at least you can still show that you’ve changed by establishing a record of good credit. There is hope if you really want to do something about it.
Here are some tips to help you fix your credit score:
- Be punctual in paying your bills. Your credit score is directly affected by how prompt you are in making payments.
- Get rid of some of your credit cards. Keep the ones with the longest credit history that you are in good standing with. Make sure you inform the 3 credit bureaus that what cards you have cancelled and discontinued.
- Stay away from bankruptcies, tax liens on state income taxes and property taxes, and collections. Bankruptcy reports stay on your credit record for 10 years while collection accounts and tax liens stay for 7. Unpaid tax liens will be on your credit record forever.
- Request in writing that creditors lower the credit limit on your account to reduce available credit amount Lenders consider the total available amount even if you’re not in debt.
- Ask a member of your family or friend to help you co-sign a loan or credit card to help you re-establish a line of credit. Be good this time and pay your bills promptly.
- Apply for a secured credit card to re-establish a line of good credit. Set aside money in the bank to cover all charged expenses. Again, be a good boy and pay off your bills on time!
- Your credit score from the 3 credit bureaus should be updated yearly to catch mistakes in entry. If you let the mistakes accumulate, you’ll have a harder time to dispute them and have them corrected.
By law, credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything.
The law contains specific protections for you. For example, a credit repair company cannot:
- make false claims about their services
- charge you until they have completed the promised services
- perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees
Your contract must specify:
- the payment terms for services, including their total cost
- a detailed description of the services to be performed
- how long it will take to achieve the results
- any guarantees they offer
- the company’s name and business address
Just because you have a poor credit report doesn’t mean you won’t be able to get credit. Creditors set their own credit standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved.
F Stewart develops personal finance software to help youth and adults better understand credit. CredMedic is a free software application that includes a credit calculator, creditor database, and personal finance information. More information is available at http://www.CredMedic.com
Tags: credit history, credit report, credit score, personal finance, credit
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