| How to Fix Negative Credit |
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| Written by Chris Blanchet |
| Sunday, 07 June 2009 11:02 |
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During these economic times it has become a little more difficult to obtain approval for the credit we seek. A lot of lenders have instated a self-imposed limit on the amount of credit they approve for any given applicant. If you have a sub-par credit rating, that means that obtaining personal credit is not only more of a challenge, but it could be impossible. Luckily, there are some simple tactics you can use to improve your credit score and leave the lender with a more positive impression after making an official credit request.
During these economic times it has become a little more difficult to obtain approval for the credit we seek. A lot of lenders have instated a self-imposed limit on the amount of credit they approve for any given applicant. If you have a sub-par credit rating, that means that obtaining personal credit is not only more of a challenge, but it could be impossible. Luckily, there are some simple tactics you can use to improve your credit score and leave the lender with a more positive impression after making an official credit request. When it comes time to fix your credit score, there are typically two simple techniques you can use. In the first, you hire a company that will promise to fix your credit. In the second, you take control of the situation and do the leg-work yourself. This second technique saves you money, and it also helps you to maintain a more permanent fix. How do you fix credit? For starters, you will need to obtain a copy of your latest credit report from top agencies like Equifax or Trans Union. Next, you will want to go through your report with a fine-tooth comp to find any errors in the account history and status fields. Highlight the areas that are either incorrect or have a negative impact on your score, paying particular attention to the areas that pose the greatest damage to your score. If you have more than one area of concern, prioritize them in terms of greatest risk to least risk. Focus on the highest priorities and file a dispute with the agency by sending them a letter. This letter will specify the error and your reason for disagreeing with the record. According to the Fair Credit Reporting Act, you can file a dispute for each negative or incorrect item that shows on your credit report. Sure, this might seem like a lot of work, but the credit reporting agency must investigate your dispute within 30 days and respond to you within five days thereafter, providing you with evidence as to why you are responsible for the negatively reported items. If they do not respond for whatever reason, the dispute item will be removed for your record, in which case your FICO score will improve almost instantly. Not all derogatory credit will be erased from your credit report, but even if you eliminate one or two top priority problems, you should expect to see an improvement to your score. Now what you need to do is really fix your credit for long-term, personal finance reasons. What this means is that after seeing an improvement to your credit report, you need to concentrate on managing the current state of your personal finances properly. This will including preparing a realistic budget and managing your credit properly. 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, an e-book 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 |