The ABCs of Credit Repair

Your credit history influences many things such as your ability to get approved for loans and your insurance premiums. If you have a low credit score, taking the necessary steps to repair your credit history is important as it allows you to potentially save money on many things in the future.

Disputing Negative Items

When you want to repair your credit, you need to look at a copy of your credit report. This way, you can see if any inaccuracies exist on your report. If you find something wrong with your report, you can dispute this matter with the credit bureaus. Most major credit bureaus have a specific system for filing a dispute on an item in your credit report. You typically have to provide a letter outlining the problem as well as documentation that proves your argument.

Reduce Your Debt

One of the most important factors in determining your credit score is the amount of outstanding debt that you have. If you have a large amount of debt on credit cards and other accounts, you need to make every effort to pay it off. Try to get your debt down to below 50 percent of the credit that is available to you. This makes it look like you are more responsible with credit, which improves your credit score.

Use Credit Wisely

You may be hesitant to use credit, but this is actually the way that you build your credit score. For example, if you have a credit card, making small, regular purchases can help you. Once you make a purchase with your card, pay off the balance immediately when you receive the statement. The credit bureaus report this and having a positive payment history is one of the most effective ways to build your credit score.

Watch For Scams

In the area of credit repair, many people want to take shortcuts to get a high credit score. This leads them to work with a credit repair company. Many of these companies charge upfront fees and then do not actually help your credit at all. Before working with a credit repair company, check some reviews online and do not make an upfront payment. You would usually be better off using the money that you would spend on a credit repair company on paying off your debt.