Fixing Negative Credit Is Easier Than You Think

At present, it is difficult to get loans for personal finance. Even lenders are placing restrictions on how much loan you can ask for. In such cases, if you have bad credit scores, getting loan for personal finance becomes even more difficult. However, there are ways to repair your credit scores so that you can leave a good impression with lenders from whom you might seek loans.

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 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.

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.

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.

When you endeavor to fix your credit, you should focus on the most negative records first by paying and clearing those debts. Also, place emphasis on any past due revolving or installment credit. Since your FICO score is heavily based on current account status, paying delinquent accounts needs to be a top priority. When you fix your credit you not only improve your FICO, but you prepare your credit for your future borrowing needs.

Chris Blanchet is the author of Help Fix My Finances, an e-book about accurately and effectively improving 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.

Related Fix Credit Articles