A good credit rating requires you to have and use revolving accounts, take out installment loans and pay all of those obligations on time, according to MSN Money website writer Liz Pulliam Weston. Your credit file looks bad when you run up too many debts, or miss payments, but there are several easy ways to repair your standing.
Catch Up Past-Due Accounts
Your credit records are hurt every month that you're delinquent on any accounts. The My FICO credit score education website explains that late payments affect 35 percent of your overall score. Credit cards and loans show up on your credit reports, so make them your priority, but pay up utility bills and other obligations as quickly as you can, too. Creditors who don't report to the TransUnion, Experian and Equifax bureaus may turn you over to a collection bureau, or sue you, if you neglect your accounts for too long. Collections and judgments appear on your reports and are figured into your score.
Dispute Harmful Mistakes
Your credit reports are likely to contain some mistakes. Bob Sullivan, a columnist for the MSNBC website Red Tape Chronicles, warns that up to one-quarter of consumer credit reports are inaccurate in ways that hurt credit. Your report is available for free every year from TransUnion, Experian and Equifax through annualcreditreport.com, according to the Federal Trade Commission. Review your records, fill out dispute forms on the credit bureau websites concerning any errors you find, and check out the results after the bureaus process your disputes, which must be done in 30 days under the federal Fair Credit Reporting Act (FCRA). Some, or all, of the negative items should be gone. The FCRA makes the bureaus eliminate entries that aren't verified by the original information providers within the 30 day window.
Eliminate Outdated Information
Most past credit mistakes don't haunt you forever. The FTC website advises that past-due bills, court judgments, repossessions, charge-offs, collection accounts, foreclosures and similar items can stay in your reports for up to seven years, while bankruptcies appear for a decade. You can dispute old items that should've been automatically erased, if you find them on your credit reports. Use the credit bureaus' electronic dispute forms, and complain that the information is legally due for removal.
Negotiate Credit Report Entries
You can often repair your credit by negotiating payment of old bills with the account holders. Lenders generally charge off unpaid balances for tax purposes if you refuse to pay for six months, but this doesn't erase your obligation to pay. A charge-off entry stays on your reports for seven years if you never take care of the bill. Steve Bucci, the Debt Adviser columnist on the Bankrate financial website, explains that you can negotiate a change or removal in the entry if you make a settlement. Insist that the lender mark the account "paid as agreed", or remove it completely, in exchange for a lump-sum payment. Get the terms in writing before sending any money.
0 comments:
Post a Comment