One’s credit score is usually a reflection of how they’ve handled their financial obligations. This is based on the information reported to the credit bureaus by creditors/lenders. Paying your bills on time and managing your accounts wisely will guarantee you a good credit score. By defaulting on your payments, your credit score goes bad. When this happens, you’ll probably need the services of credit score improvement company. Bad credit makes your financial life difficult and expensive. Lending institutions check credit scores before giving out any loan or credit card.
With bad credit, you will incur high interest rates on loans if you get a lending institution that is ready to give you a bad credit loan. The good news is that you can fix the mistakes affecting your credit and increase your credit score. Getting your credit score is critical to saving money on loans, credit cards, and insurance. Credit score improvement company also helps you to qualify for new employment and even promotions and raises with your existing employer. With a good credit score, you have the security of knowing that you can borrow money anytime need arises.
When you want to have your credit score improved, you can opt to fix it by yourself or have it handled by credit score improvement company. Opting to fix your own credit rating can help you save money and the hassle of finding a good credit score improvement company to do it for you. Below are steps of improving bad credit:
Get Copies of Your Credit Report
Everyone is entitled by law to free credit reports from the three credit bureaus (TransUnion, Experian, and Equifax) every year. Credit score improvement company can help you order the reports directly through the credit bureaus. Another option is to pay for your credit report, but only if you’ve already used up your yearly credit report. The main reason for having all the three credit reports is for you to confirm that they all contain similar information. Some creditors and lenders tend to report to one credit bureau, complicating your credit standing and reputation. If this happens, you will have to restore your credit at all the three bureaus instead of working on one.
Your credit report has all the information of your credit history and details of the things that are inaccurate and are lowering your credit score. These include your high credit card balances, past due accounts, public records or debt collections. You have to study your credit report thoroughly and identify the negative items that are affecting your credit rating. Check your personal identification information, detailed history of all your accounts, public records like tax liens and your creditors/lenders reports for any misinformation.
They type of information that requires credit score improvement include:
- Incorrect information such as payments which are incorrectly reported and accounts that don’t belong to you.
- Overdue accounts that are charged off are late or have been given to collectors
- Maxed out accounts that have exceeded the credit limit.
After identifying the incorrect information, develop a credit score improvement plan and approach for each information. Collaborating with your creditor will greatly help your progress.
Disputing the errors on your credit report
Note that you have the right to a credit report that is accurate. Therefore, you can dispute any incomplete, inaccurate or unverifiable information in your credit report through credit score improvement company. Your credit reports come with instructions on ways of disputing your credit report information. You can make disputes by calling, or emailing.
Methods of disputing credit score information
Making your disputes online is fast and easy, but you will not have a paper trail for your records. Sending the disputes by email allows you to attach proof and keep a copy of the communication. When you send your dispute through the certified mail, you’ll also get to keep proof of the details and dates you mailed the dispute. Having dispute records is vital for subsequent follow-ups and verifications.
When sending your dispute, always attach a copy of the credit report and the item in dispute along with proof that supports your dispute. Include all the information about your dispute to avoid your dispute from being declared frivolous. If this happens, the bureaus will decline to investigate the dispute and your credit report will not be updated. A reputable company that deals in credit score improvement will be able to expedite the process for you. The credit bureau always sends a response to your dispute after completing their investigation. Another alternative to a credit bureau dispute is through direct dispute to the companies that listed information on the credit report. They have the legal obligation to investigate the dispute and remove the incorrect information from your credit report.
Settling past due accounts
Your payment history greatly affects your credit score. It comprises 35% of your overall score. Having multiple past due accounts listed on your credit report will hurt your score significantly. Settling these accounts is crucial to credit score improvement. Use the services of credit score improvement to take care of accounts which are past due but not charged-off. Talk to your creditor and discuss options that will change your account to current. The creditor may agree to waive late penalties or spread the balance over fewer payments. They can also agree to re-age your account to show your payments as current. Charge-offs hurt your credit rating, and they must be paid. Outstanding balances on charge-offs will make it impossible for you to get approved for loans or new credit. Settle collection accounts too by paying in full or through a pay-for-delete, or even settling them for less than the balance due. Ensure that your credit card balances, loan balances and all your past due accounts are below the credit limit.
Get new credit
In case you have loans and credit cards that you service on time, keep them current by making payments on time. In case you don’t have any try to get new ones and ensure you pay them on time. You can consider getting a secured credit card if you are denied a major credit card. For you to get a credit limit, you will have to deposit a certain amount on your secured credit account as a security deposit. Avoid closing your current credit card accounts as it may affect your credit score.
While working towards a better credit rating, don’t sacrifice the positive accounts for those that are in bad rating. Keep making timely payments on the current accounts. Learn what things affect your credit score negatively and avoid making the same mistakes next time. Remember that your credit rating may drop unexpectedly as you carry out credit score improvement. But this does not mean that you’re not doing things right. Just keep adding positive information on your report, and the credit score will go up over time.