Bad Credit Report Repair

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Your credit score can open doors for you or it can slam them in your face. Your credit report is the primary tool lenders use in determining if you will qualify for a loan. Some employers also order your credit history. If they have a minimum score requirement and you don’t meet it, you don’t get the job. There are other situations when your credit matters but probably nothing is more important than your personal finances.

It would be best to pay cash for all your purchases but that is unrealistic. A house is usually your largest obligation. The items you use as collateral are not yours until the note is paid in full. Sometimes things go wrong, bills do not get paid and your credit gets messed up. Many times the situation snowballs out of control. It becomes difficult to get new credit, if you do you are forced to accept high interest rates, insurance applications are denied, you don’t get the jobs you apply for, and life becomes extremely difficult.

There are numerous companies that claim to help consumers reduce their credit card debt. Others provide credit counseling. Some of these are legitimate and some are not. Many of them charge fees which only increase your debt. They negotiate with the creditor – something you can do yourself. If you decide to do this, pick one that does not charge a fee, usually a United Way agency. Check with the Better Business Bureau and ask for references when in doubt.

Sometimes when there are credit problems the individual gives up or they don’t care. “My credit is already ruined so why should I continue to make my other payments on time.” When you agree to pay someone, or a company, you should fulfill that commitment. Just because you default on one account doesn’t mean you have to default on all your accounts.

Usually the problem starts with just one creditor. That’s the time to take action. Contact them to see if the payment or interest can be reduced, or if you can skip some payments. Most creditors prefer to work with you before the account gets out of control. If there are several accounts involved and you have no way to repay them it is still best to contact all the creditors. Some people let the lenders chase them for months or they go to great lengths to avoid the collectors. This only makes a bad situation worse. It is better to be honest with the creditors as soon as you know there is a problem.

A bad credit report and low credit scores can be corrected. It will take time and work. Creditors understand things happen. When you have been late with payments and defaulted on loans, the creditor does not want to lend you money again, until you prove you are now able to handle your money. Make all your payments on time, once you have recovered from the event that caused the problem. Judgments and collections should be paid. Be prepared to prove you have taken responsibility for all the negative items on your credit report. Eventually new good credit will out weight old bad credit.

There are three major credit bureaus in the U.S. Creditors decide which ones to report to. Each bureau gives you a score and each report is different. Usually there are some accounts that are on all three reports but sometimes there are problems which do not show up on all three. If you have been denied credit you should receive something in writing along with the opportunity to get a copy of your credit report. Take advantage of this and when you receive your report review it completely.

If you do not apply for credit you should at least order copies of all three reports regularly. Sometimes there are mistakes which bring your score down. It’s not always easy to correct errors but it usually pays off. You have to prove why the information is incorrect. That can involve phone calls and letter writing. The proof has to be submitted to the bureaus. Correcting something with one bureau does not necessarily correct it with the other two. Usually you have to contact all three bureaus. Sometimes you have to do this more than one time. Keep copies of all relevant letters and proof.

It is better to correct minor issues before they become full blown problems. Before applying for a mortgage you should review your credit. If there are problems it will take time to correct these. Some lenders will help you with this but ultimately it is your responsibility. It is your credit! There are companies who assist people in repairing their credit. But why would you want to pay someone to do something you can do yourself?

Identity theft has created major problems for individuals, creditors and credit bureaus. The thief not only steals your credit but they sometimes steal your identity. You need to be more aware of all issues involving credit, question any suspicious activity, and review your credit reports regularly. Do this and you could prevent problems before they occur.

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