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Thursday, October 6, 2011

3 Easy Steps to Fixing Bad Credit

Without a good credit history and rating it is difficult to get a loan for a home, automobile, college, or other high-dollar value purchase. Some employers even check credit history when considering you for a job. Credit history influences practically every aspect of our lives so it is in everyone's best interest to take measures to fix bad credit. Fixing bad credit really only involves 3 easy steps as follows.

Get Your Credit Report

Everyone is entitled to get a free credit report from the three major credit reporting agencies. These agencies are Experian, Equifax, and Transunion. However you can find any one of a number of free credit report websites where you can order reports from the three agencies in a one-stop manner. All Americans are entitled to one free credit report each year per federal mandate so there is nothing stopping you from taking care of this step right away.

Besides the credit report, you should also get an idea of what your credit score is. The free credit reports will not list your credit score but you can get that metric for an additional charge. If you are applying for a loan and are turned down, you could ask the place where you applied what credit score was returned when they ran a check.

Clean Up Your Credit Report

While this step may not seem easy, it really is. It is merely a matter of checking your report and noting anything that is not correct. Negative marks with the exception of a bankruptcy or judgment must be verified by the credit bureau at your request. Any item that you bring to the attention of the bureau must be removed if it cannot be verified. There is really nothing to do about bankruptcies and judgments except let time pass. Of course if the statute of limitations has passed on reporting a bankruptcy or judgment then you should ask why it is not removed.

Take Credit Healthy Action

This is probably the most important of the three steps. Taking credit healthy action means paying your bills on time, managing your credit accounts, and not shopping for too much credit. The easiest way to pay your bills on time is to keep some type of calendar with due dates in a way that is easy for you to remember. If you can, always pay bills online because there is little chance of the payment getting lost in the mail.

Credit healthy actions include paying down credit cards that are approaching their credit limit. Of course you never want to run a card over its limit. Fixing bad credit requires you to show the credit bureaus that you are keeping low risk in the event of financial disaster. Credit cards run up to their limits are danger signals and can quickly get out of hand should you lose your job or become disabled.

And lastly, to fix bad credit you should only get new credit if you have no other choice. If you have to get another car because the one you have is on its last leg then you will probably have to get an auto loan. While this may not be avoidable, don't shop around too much because each credit inquiry puts a negative mark on your credit report. Of course the worst thing you can do in this area is applying for too many credit cards.


source: ezinearticles.com

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