How To Fix Your Credit By Yourself

Credit is one of those things in every adult’s life that very few can actually run away from. It is tied to your identity and influences many of your most critical financial decisions. Without good credit, it would be difficult to buy a home, get a new car or apply for a credit card. In some cases, a bad credit history can even affect an individual’s chances of getting a job. Although there are third parties offering assistance to fix credit, it is possible to do a DIY (do it yourself) credit repair using these steps:

Know Your Credit

The best way to determine the state of anyone’s credit is through a credit report. In the U.S., credit reports are filed through 3 major credit bureaus – Equifax, Experian and TransUnion. All creditors report to at least one of these bureaus, so reports from all three are likely to have a discrepancy. Anyone is entitled to a free gov credit report from each bureau every year, which could be accessed through AnnualCreditReport.com.

Make Every Entry Count

Every consumer should remember that credit bureaus only generate credit reports with information provided by creditors. It is not the job of the bureaus to verify. As such, any mistake or error in the reporting is not their responsibility to correct. That would be the job of the consumer.

Once the reports have been received, examine the entries for any possible errors, including misspellings, typos, incomplete, inaccurate and outdated information. Any mistake must be formally disputed in order to correct the report and improve the credit score.

Dispute Errors

Whatever errors are found on the report must be disputed in writing. This can be done two ways: writing a letter to the credit bureau or using the dispute form that comes with the report. It is important that for every item disputed, the error should be clearly identified and the reason for the dispute stated. A copy of supporting documents should also be provided. Followup with the credit bureau in question may be necessary until the error has been corrected.

In some cases, an error may be corrected by getting in touch with the creditors and informing them of the problem. Any document they provide will help in rectifying the error. The credit bureau in question will then review the dispute, modify your report and send an updated copy at no cost.

Improve Your Finances

Any negative entry in the report that is true cannot be undone, so it is important to ignore offers and advertisements that say otherwise. Only time and regular repayment of debts will improve that. The only genuine way to repair credit is by taking charge of your finances – paying bills on time, minimizing unnecessary spending and increasing the amount of your savings. Creditors very often consider the payment pattern of consumers over a few incidents of failure to pay back debt. When payments are regular over some period of time, your credit rating improves.

Don’t Run Away From Creditors – Be Proactive
Possibly one of the most important advice here. Do NOT wait to default on a payment before talking to creditors. If payments will be late, immediately get in touch with the lender and negotiate a term before the due date if possible. For Example: If you can’t make the credit card payments before the due date, then call your credit card issuer right before (or maybe exactly on) the payment due date. Tell them you’re in a bind. (Yes, the tendency is to avoid making such a call because we might feel ashamed that we couldn’t make the payment. But avoiding the problem will definitely make things worse). Usually your creditors will be lenient towards you and give you a one month extension. They also won’t report you as delinquent or late to the credit bureaus. They will work with you and extend the due dates or reduce your monthly payments. You in turn get to keep your credit rating in good shape. A win-win situation. But if you avoid calling them and decide to hide, that’s when your creditors start to panic. Report you as delinquent. They want to know they can get in touch with their borrowers. So don’t be wary, feel embarrassed, ashamed, or too proud, in taking the initiative to work things out with your creditors.

Your Credit Score After Personal Bankruptcy

Filing for bankruptcy is usually the last step an individual takes when they have exhausted all other options of dealing with an unmanageable amount of debt. Usually, people struggle to keep up with their bills because they may have lost their job or incurred huge medical bills. Many others got caught up in the housing debacle and are stuck with extra-high mortgage payments and a house that is only worth half of what they still owe on that mortgage. Still others are forced to file bankruptcy because they simply abused credit cards and can no longer make even the minimum payments.

Before one gets to the point of filing for bankruptcy, their credit score has usually been seriously degraded. Failing to pay bills on time, or not paying them at all, will definitely cause one’s credit score to drop. Filing for bankruptcy is actually a chance to wipe the slate clean and start to practice smarter financial habits that will help you rebuild credit.

Some people might just be so happy to be rid of the stressful burden of massive debt that they will make themselves a promise to never borrow money again. Well, that sounds good, but for most people living in the real world, it is not very practical. While one can usually get by without credit cards and rely on a debit card, having good credit touches so many other areas of life.

If you ever want to buy a home and qualify for a mortgage, having a good credit score will determine whether or not you are approved and the rate of interest you will be given. The same applies to other types of loans such as to purchase an automobile or finance some major appliances or furniture. Your credit score can be a factor in numerous activities most of us take for granted. You may not get a job because of a bad credit score. Your insurance rates could go up. If you want to rent a car or reserve a hotel room, it is very helpful to have a credit card.

One of the requirements of getting your debts discharged in a bankruptcy proceeding is that you take an educational class that teaches you how to deal with money and debt. If you pay attention, you will learn how to properly use and manage debt. Rebuilding credit will also be discussed.

The first step toward rebuilding credit after bankruptcy is to become responsible. You must pay all of your bills and all of your creditors on time, every month. By establishing a long record of regular payments, you will begin to rebuild credit. Some of the bills that you might concentrate on paying without fail include your rent or mortgage, utility bills and any installment payments you may have.

Setting up a checking account and possibly a savings account will show that you are taking steps to improve your financial standing. After a while, you might apply for a small personal loan from your bank and repay it in a matter of months. This will be a positive mark on your credit report. You can obtain your gov free credit report from annualcreditreport.com to perform this check.

Applying for a secured credit card is another way to restore your credit. It works by putting a sum of money in a savings account. That money becomes your credit limit. The money remains in your account as you use your secured card. As long as you follow the terms of the credit agreement and pay your credit card bills as they come due, your deposit is never touched. However, if you are late or default, the bank or credit card company can get back the money you borrowed from the amount you have on deposit.

Finally, time is your ally when trying to rebuild your credit and credit score. Just as it probably took years to destroy your credit, it can take years to restore your good standing. By paying your creditors on time and being financially responsible, you will positively impact your credit score.

Secured Credit Cards Helps Rebuild Credit History

Secured credit cards afford people the opportunity to raise their credit history and score, rebuild credit, and be able to use a credit card when otherwise not allowed.  Very few people use cash these days, so these cards are important for shopping.  Plastic has taken the place of paper money in many stores.  Most places take these cards for easier processing of products or services that are purchased along with a higher convenience for customers.

Secured credit cards differs from regular credit cards.  Secured cards requires a person to manage a savings account and place a security deposit prior to beginning.  The deposit is the actual credit limit that gives security during the times when a person can not make a payment in full.  Depending on bank policy a person usually has to deposit half to the full amount of the total credit that is needed.

On the down side, there are fees linked with having secured cards.  Most have application fees, processing fees, and yearly fees as well. Certain banks are subject to charge more fees including monthly fees or those applied when increasing the credit limit.  Asking about the processing fees, especially if they are refundable if the application is denied, is important.  The answer will save a lot of hassle. Similar to other contracts, make sure to thoroughly understand all of the terms and conditions prior to signing on the dotted line.  The last thing that a person wants is to get charged fees that are a surprise.   The law states that a person must pay fees at regular times.  If payments are delayed,  it may negatively affect a person’s credit history.

There are many credit companies over the internet that say that they will give a person a quick and simple secured credit card with low fees and great incentives.  However, it is important to think wisely and begin a relationship with a reputable company that will provide good card services.  Some secured cards with high promises may end up to be a real nightmare and cause great headaches.  The first step is to do research and compare all offers and select the best deal.  Google is filled with reviews from multiple companies and a person can always consult with friends and family for trusted advice.  A person can save a great amount of time and energy when taking all of these things into consideration before making a final decision.  A person can learn from others’ mistakes.  One of the top banks that has a good secured credit card is the National City Bank.  In the recent past, the only thing that is needed is a deposit of $200 to open an account and the  card will be sent.  Orchard Card is a good alternative that only requires a bit larger of a deposit.  It does have certain fees that a person must ask about.

A secured credit card can help a person to establish and improve past credit history.  It can also give a better credit score and will be useful when trying to get other credit down the line. Do make sure you check your yearly free credit report to see what your credit history is like. Before a person signs a contract, they must read all the fine print and comprehend all of the charges and fees that are associated with it.  Research is necessary to uncover the best deals and will assure that there is no future regrets.