How To Fix bad Credit

It is estimated that seventy million people suffer from negative credit. Our lives revolve around credit; therefore, it is crucial that we keep our credit is in good standings. Credit affects us in many ways especially when applying for loans. Credit can also be affected by land lords, who use past credit history to determine if you qualify to rent their home. Some careers are also affected by credit rating, and is usually the determination of whether you get that new job or not. All of this can be very costly as a long term result. The way to avoid all of these problems is to have a good credit rating, or at least fix your current credit problems.

 Fixing credit problems can be difficult or easy depending on the status of your credit. The first thing you must do is, find out the status of your credit rating. This can be accomplished by getting a copy of your credit history and rating from one of the three major credit bureaus. Once you have a copy of your credit history, you need to know what’s on it. You need to know your credit score, your high credit limit, your debt to ratio, and if there are any derogatory items listed in your credit history. Your credit score needs to be around 700 or better. If your credit score is not at this level, you need to try to get it there. After you past the 700 mark is when your credit will benefit you the most at which point you will receive more loans with better interest rates.

The high credit limit also needs to be at least ten thousand dollars or gather. This can be accomplished with more credit cards. Keep in mind when you get these new credit cards, do not abuse them in any way. The idea here is building up your credit limit, not going further into debt.

The debt to credit ratio is also important. You want a high credit limit but you do not want high debts on these cards. Actually you do not want any debts on these cards unless you are trying to build your credit or in the process of making some temporary money by using your credit cards. The ideal credit would be about 10% to 25% of debt on these cards at all times. This percentage comes from the total of your high credit limit, which comes from the total amount of credit you have on all of your credit cards, and the amount of debt you have on your credit cards. Now, I hope I did not totally confuse you but loan institutions like to give credit to individuals who will use their credit more so than people who pay off their monthly balances each month. The loan institution want to make money and you want a better credit rating. Basically you are buying your credit from your loan institution by paying the interest on your payments. If you have purchased everything you want and do not need a loan, than you should pay off these credit cards; however, if you are in the process of obtaining a loan, you need to show the loan institution that you use credit. This method only works providing your credit card payments are always on time and your balances are current.

Your credit score comes from a list of different areas. A credit score is very important due to the fact it shows loan institutions where you stand with your credit and your past credit history. It also details if you are a financial credit risk. This is actually good for the loan institution because if you are a financial risk, they will jack the interest rate up as far as they can, if you truly want the loan. This credit score will also show the amount of credit you can qualify for and ultimately your interest rate. If your credit score is higher, your interest rate will be lower. Credit scores are set up on a point system, the gather the points, the higher the score.

Here is a list of the different categories that helps determine your credit score:

•  Age
•  Number of dependents
•  Stability
•  Number of addresses and how long
•  Employment status
•  Telephone listed in your name
•  Credit history
•  Type of work
•  Monthly obligations
•  Credit background
•  High credit limits
•  Debt to credit ratio

 There are many more categories that can bring your credit score down to a lower score. The following list shows the different types of items that appear negative toward your credit rating.

• Bad credit references
• No credit file
• Delinquent on obligations
• Bankruptcies
• Foreclosures or repossessions
• Residence status, length of time
• Too much obligations
• Self employment
• Late payments
• Collection accounts
• Judgments
• Defaults on loans

 Now I want to discuss Derogatory items. These are items discovered on your credit file that are not accurate or negative items. These items must be removed from your credit file. There are a couple of ways to get this accomplished. You can either fight with the credit bureau and your creditors to get this accomplished, or you can pay someone to do the work for you. I recommend you pay someone to do the work for you to achieve the best results. When paying for a service you usually get the results you want or what is requested. This may take some time to get the items removed from your credit file, but at least you will know eventually the items will be removed and you’ll end up with a clean credit file. The stress level and your time spent to remove these items are just not worth wasting when you can pay someone to remove these items for you. If you choose to have someone remove these items for you I recommend that you choose this person wisely. You need to choose a person who deals with these issues often, a person who is creditable like a legal firm. Attorneys who handle these issues daily will give you the best results. Some attorneys will charge up to three thousand dollars to get you a new credit file. Bankruptcies will cost about two thousand dollars while derogatory items will cost you between three hundred and a thousand dollars per derogatory item. As you can see cleaning your credit can be costly but you have another option. There are attorneys on-line who will work for you to accomplish the same thing and it’s a lot less expensive. These are lawyer firms who charge about seventy-nine dollars to set your account up and a small monthly fee to continue the process. The fee to continue the process is about thirty-nine dollars a month. This is a great way to fix your credit problems and I recommend you try this avenue first. If you are unhappy with your service and the results you are getting, you can always cancel your membership and try a different avenue. The only thing you have to do if you choose this route is to make sure the legal firm on-line is an attorney and not just a scam to get your personal information. This task can be easily accomplished by calling the better business bureau and checking up on the company. You have to do a little investigating yourself to make sure this company is a legal business. Other than that you are home free.

If you decide to pursue your derogatory items yourself, you must know first of all, derogatory items known to be true should not be disputed. This method would be unorthodox, and may cause some legal ramifications. Attorneys and other assisted firms can around these issues by simply not asking you if they are correct. To them it’s about providing a service and the money involved to perform the service for you. Besides, they feel that you would not lie about these issues, right?  

If you wish to dispute an item you should know according to the Fair Credit Reporting Act, items should be removed after a specified period of time. This time is usually seven years and longer for bankruptcies. Items known to be incorrect should be attended to without delay. There are no reasons why you should have any derogatory marks on your credit file that should not be there. These types of problems are usually a result of a filing error, possibly just entered incorrectly. Either way it was put there, it’s wrong, and it needs to be removed. It is simple to remove these errors on your credit file. All you have to do is contact the credit bureau and explain the errors on your credit file. You will also have to provide your personal information such as your address, date of birth, and social security number. Explain the problems and that is basically it. This will probably need to be in writing, but start with the telephone call first, you’ll need the correct address and contact department. The only other thing you will need to do is keep following up on the progress until the incorrect items are removed. If you still do not get the results you seek from this simple request, keep sending the credit bureau copies of your letters every six weeks until the issues are resolved. Eventually the credit bureau will want the letters to stop and ultimately fix your credit file.

For other derogatory items that you want removed from your credit file and you know they are correct, there are other techniques you must use. First of all, you must understand this. You do not have to prove the derogatory items on your credit file are incorrect; however the company who filed the derogatory item on your credit file does. This is good news for you and here’s why. Most companies get rid of their old documents because they usually take up too much space. Some companies are bought out by larger companies, or companies move from one location to the next. There are many reasons why your documents could get misplaced or destroyed, and this is good information for you because the company has to prove your derogatory item. That’s not all; the company has a certain amount of time to prove this derogatory item. The cards are all in your hands, you just need to know how to play the game and most importantly follow up with the credit bureaus to make sure the company is on a time line to produce the documents. For the most part, after you file your incorrect derogatory items, keep your fingers cross and pray that your documents are lost. If this does not work, file the same case every six months and eventually the documents will be misplaced. If this technique still does not work, you should contact an attorney or a credit repair specialist to assist you in cleaning your credit file.     

Article by: Dynamic Publishing (c)

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