What is credit repair?
When you repair your credit It means cleaning up negative information that may affect your credit score. You have two options: do it yourself or hire a credit repair company to make sure you clean up any sort of errors.
Why would I hire the services of a credit repair company?
Generally, choosing the right credit repair company will be a much safer option than doing it yourself because you can miss tiny errors that could really mess up your credit report.Here are the different tasks that a credit repair company or you will have to do:
- Carefully review your credit report for incorrect listings and look for any ways available to improve your score.
- Apply for credit repair.
- Accept your claim. If the company decides it can help you, it will accept your application and start looking into your credit history.
- Contact creditors.
- Pay a fee.
- Remove listings.
Let’s now go over the process to repair your credit!
1. Find the causes of your bad credit.
MAke sure to get a look at your credit report, as it will show you the negative elements that have caused you to have a bad credit score.
When you receive your reports, look for three things in particular: inaccurate information, past-due accounts and maxed-out accounts.
2. Dispute inaccurate information.
Information such as:
- Debt you’ve already paid.
- Accounts you’ve closed that are reported as open.
- Incorrect credit limits.
- Accounts that are current but reported as past due.
- Incorrect account balances.
3. Get current on past-due accounts.
Late and missed payments will hurt your credit. If your credit history still shows you haven’t paid your debts, lenders will be wary about extending credit to you. Paying off your accounts gives you a better chance of getting approved for a loan.
4. Fix your credit utilization ratio.
You should put your focus now on fixing your credit utilization ratio, which is quite important as it represents 30% of your final credit score.
5. Add new sources of credit.
So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.