Current economic troubles all over the world have left lots of people struggling with bad credit reports and low credit scores. Current problems in all of the financial sectors have changed a lot of of the rules of the past and some of the old rules are now outdated. This has left many people not knowing what to do about bad credit and poor credit.
A credit score is a numerical rating that relates to a person’s creditworthiness. However important these scores are, countless people are not even aware of what a credit score is composed of. Not many people understand how important debt to credit ratio is or that inquiries into your report can immediately drop your score. The reality is that if you have credit and really use it you are considered a high risk and if you shop for credit you are also considered a high risk. To capitalize on your credit score you need to keep your debt at 15 to 35% of your available credit and do not allow anyone to inquire into your credit.
Under the FCRA or the Fair Credit Reporting Act you do have the right to be given one free copy each year of your own credit report from each of the major credit reporting agencies. It is sensible to get this report each year so you can track your report and make sure that it is looks as positive as possible.
It is likely that as many as 75% of all credit reports or even more than that have mistakes and inaccuracies. These mistakes can cost you when you are trying to obtain credit so if you get a report every year and make sure that it is clean you can avoid many of these problems.
The FCRA gives you the right to dispute mistakes and inaccuracies on your credit. After a dispute is received the credit bureaus have 30 to 45 days to prove that the reported credit is accurate and true. It is estimated that as much as 45% of all disputed credit is not verified within the time frame and consequently it must be removed from the report. Consumers can use this to their benefit if they are willing to go to the effort to issue a dispute.
There are also other things that you can do to better your credit score and credit rating. Because the debt to credit ratio is so significant you can get your credit limits increased or you can pay down your balances so that your debt does not exceed 15 to 35% or your available credit. You should also absolutely avoid any inquiries into your credit. If you must shop for credit be very selective and only shop where you know you will get the credit and then have the creditor join the inquiry into the loan reporting. That means you will not be showing inquiries.
You can take the steps required to repair your credit on your own or you can hire a professional to assist you. If you hire a professional make sure you do your research and go with a trustworthy company with a good track record. Having credit troubles is bad enough without losing money to a scammer too.
Credit repair can be accomplished. It is not a myth. Congress passed the FCRA to allow consumers to defend themselves against inaccuracies and discrepancies on a credit report so take advantage of that piece of information and do everything you can to improve your credit report.
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