Archive for August, 2010

Do You Really Need Professional Credit Repair Services?

It is a common misconception among many people that professional experts must be hired to repair one’s credit. In reality, the companies that offer credit repair services do not do anything as such that you cannot do yourself. Therefore, if you are serious about improving your FICO score, consider making it a DIY project rather than paying others to do things that you can do for free. Having said that, it does not mean that all such companies are fraud. Though many of them definitely are, there are genuine companies also. But, considering the very fact that there are hundreds of such companies available out there, it is not at all an easy task to choose the right service provider. If you are not careful with your selection, you are very much likely to become a victim of fraud or scam.

It is not possible to repair if you do not know what exactly you have to repair. Therefore, the first thing you have to do is to request the three major credit bureaus to send you an up-to-date copy of your credit report. Here, it is very important for you to keep in mind that if you are using professional credit repair services and allowing the service provider (a third party) to request your report from the credit agencies, it will have a negative impact on your score. Therefore, whenever you need to access your report, make sure you request it on your own.

Do A Thorough Review Of Each And Every Entry On The Report

Your report contains lots of entries about your credit activities, such as whether you paid a specific loan in time, (or if you were late, how late you were), whether you settled an account using a debt settlement program, whether you ever used credit counseling services, and an array of other such things. There are a few important factors these reports are based on, such as the length of credit you use (the repayment period for a debt), limit on your credit card and how much of that limit you used, the total amount of debt you owe, how frequently you made enquiries for loans or credit cards, and an array of other such things. By reviewing these entries, any one can easily determine how good you have been with your finances (especially when it comes to dealing with debts). But, when you review these entries, your purpose should be to find out if there are any mistakes in those entries. Are all the entries correct and complete? Sometimes, incomplete and incorrect information results in bad credit score. So, keep your eyes wide open while you do the review.

File A Dispute To Rectify Incomplete Or Incorrect Information, If Any

Filing a dispute to make corrections on your report is not a complex process and there is no need to use professional credit repair services for this. For example, if you have made a monthly payment on a specific loan and the report says that no payment has been made, you can submit an application with the credit bureau explaining the reality; make sure you provide sufficient proof in support of your claim (such as a payment receipt). Please note that credit bureaus do not make entries on their own. They make their entries on the basis of the information provided by your creditors. So, make sure you also inform your creditor about it. Here are the details on the .

Either Pay Or Get Current With Your Past Due Accounts

Your payment history plays a crucial role in determining your credit score. If you are not making the repayment on your debts in a timely manner, it will have a very bad effect on the health of your credit rating. If you are in a situation like this, you are likely to find those credit repair services quite lucrative that give guarantee for quick fixes. But remember, the only legal way to get your payment history reported as “paid” or “current” on your report is either by paying your debts off in full or just getting current with your payments. So, do not let those unscrupulous companies fool you into believing that there can be a magic wand to – there is no magic wand. It is a step-by-step process. How fast or slow the improvement occurs will depend on how fast you are in paying your debts off. If your accounts are in collection, you need to work out a .

Take Care Of Your Credit Utilization

Just because your credit card company has provided you a high limit on your cards, it does not mean you should max on it. It is very important for you to understand that credit utilization contributes to 30% of your FICO score. Therefore, your strategy should be to bring all maxed out accounts below the credit limit. Once you do that, the next thing you have to do is to pay off the balances in full. Just making the minimum payment may look like an easy option, but it will only push you into a deep financial crisis in the long run. So, make sure you pay off the balances in full every month.

After Removing The Negative Entries, Work On To Add Positive Entries

Once you manage to remove all negative entries from your credit report, you should work on to get positive information added on it. You do not have to do anything new to do this. You just have to be current with all your payments and keep the balances on debts at a reasonable amount.

Credit repair services may look like a lucrative and easy option, but as you can see, the process of repairing your credit does not really require you to hire an expert. But yes, if your debts are overwhelming, you may consider using the services of an expert credit counselor. They can provide you suggestions on how you can put your finances back on track and take care of your credit situation.

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