| Fixing Negative Credit Is Easier Than You Think |
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| Written by Chris Blanchet |
| Wednesday, 03 June 2009 08:55 |
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Currently, securing personal loans can be something of a challenge. Many credit companies have imposed policies that limit the amount any lender can advance to a given applicant. So, if you have a substandard credit rating, obtaining personal credit has become extremely difficult if not outright impossible. The good news is that there are some simple techniques that you can use to improve your credit and leave a more positive impression with lenders after you make a credit application.
Currently, securing personal loans can be something of a challenge. Many credit companies have imposed policies that limit the amount any lender can advance to a given applicant. So, if you have a substandard credit rating, obtaining personal credit has become extremely difficult if not outright impossible. The good news is that there are some simple techniques that you can use to improve your credit and leave a more positive impression with lenders after you make a credit application. There are two simple ways you can fix your credit score. The first involves hiring an agency to fix your credit. The second, more common way is a do-it-yourself solution that not only saves money but allows for a more permanent solution. How do you fix your credit? You can start with the most recent copy of your credit bureau report which you can obtain through leading credit reporting agencies like Equifax and TransUnion. Next, you should examine your report closely and highlight areas of concern, particularly those that give erroneous or damaging information in your payment history and current credit status fields. Highlight the fields and records that provide either inaccurate information or that have a negative impact on your overall credit score. If you find more than one item, give them a priority ranking with the most-damaging ranked first. You will want to focus on these areas first and file an official dispute with the reporting agency by way of a letter. In this letter, explain the error and give your reason for your disagreement with the information reported. In accordance with the Fair Credit Reporting Act, you can file a dispute for each negative and incorrect account or item and the credit reporting agency has to review your account and respond to you within 30 days. The credit reporting agency has an additional five days to respond to your dispute. If they fail to do so, or if they are unable to provide a response that proves you are indeed responsible for the way the account has been reported, then the disputed item will be cleared from your record. This will have the impact of improving your FICO score rather quickly. Now, you can probably see how easily it would be for the credit reporting agency to respond to so many disputes on your record. But it is unlikely that all of the derogatory information will be cleared from your credit report. Still, you can reasonably expect to see an improvement to your credit score. But this is just the first step to fix your credit for long-term, personal finance reasons. In fact, after seeing an improvement in your score, you should focus on managing the rest of your personal finances properly, including creating a realistic budget that will allow you to properly manage your credit. In summary, when put a plan in place to fix your credit, start with the most negative records on your credit report. Ideally, paying or clearing those debts is your best option; failing this, considering filing a dispute letter with the credit reporting agency if there is reason to believe the information is inaccurate. Since your FICO score depends heavily on the current status of your credit accounts, place past-due accounts your top priority list. When you fix your credit, you not only increase your FICO score, but you are planning for your future borrowing requirements. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Chris Blanchet is the author of Help Fix My Finances, a textbook about legitimately taking back control of your personal finances, which is the basis of the Members Only program of the same name. You can visit his debt-free blog, How To Repay Debt. Get a totally unique version of this article from our article submission service |