How To Repair Your Own Credit

You do not need an expensive credit repair service as once you know how to repair your own credit, you will find it a fairly easy task.

First you need to find out why you are having problems obtaining loans or have a low score. The only way to know for sure is to order your credit report from the three different bureaus, Transunion, Equifax and Experian.  As these companies do not share information you can find different entries on each file.

Check all the information your file contains in particular checking the credit limit on each account, the accuracy of the payment history and for any fraudulent activity. If you spot what you think is an error, you are entitled under Federal Law to have it fixed.  You must write to the relevant bureau and advise them why you think it is wrong.  They will then contact the financial institution who made the report and ask for proof of the accuracy of the entry.  If they fail to respond or cannot provide proof, that particular entry must be removed from your file. You should do this with every entry you find a mistake on.  But some credit repair specialists will advise you to do it for all entries on your file. That is not ethical if you know the information is correct and will probably prove to be a waste of your time.

The next issue to address on your file are any past due accounts. Your payment history is a very important component of your credit score result so you need to address any account that is lowering this number.   You must try to have all past due accounts brought up to date as soon as possible so their status changes to paid or current.  Then you should try and keep up to date with these commitments as this is the quickest way to increase your rating.

If accounts have been marked as charge offs, try to repay this money as soon as you can so that they can be removed or their impact on your score reduced.  Work with the companies to come to an arrangement you can afford on your collection accounts if you hold these.

Have you maxed out your existing credit cards? If you have, you need to get these balances down as soon as you can and stop using the cards. Try living on cash from now on and work out a budget that you can afford to stick to. It is estimated that almost 30% of your overall score is worked out using the ratio of debt you have compared to the amount made available to you. So for example if you were approved for $1000 but have only used $550 you will score much higher than someone who has used $999 although they are still within their limit.

The reality of the situation is that while you may know how to repair your own credit, you will have to work hard and be committed if you want to achieve this goal.