How To Fix Your Credit For Free and Improve Your Score

How To Fix Your Credit For Free and Improve Your Score

Credit repair isn’t as hard as many people assume. In fact, improving your credit score doesn’t take years or even several months as many people thought.

Its easy to assume that without the help of a credit repair company or expert you wouldn’t be able to fix your credit. That’ absolutely false!

You can repair your credit all by yourself and get it right. The process doesn’t require rocket science.

That said, credit repair is similar to enhancing your professional network. You only consider it when it really matters.

This is why you should start your credit repair right now, before it becomes an urgent situation.

All you have to do is follow these simple steps to fix your credit and boost your credit score – and the possibility of obtaining loans on easier terms.

Steps To Credit Repair

Let’s get started:

1. Request For Your Credit Reports

All three major credit bureaus (TransUnion, Equifax and Experian) are mandated to send you a free copy of your credit report once in a year.

But you’re required to request for these reports. So go ahead and ask. You can do so via their websites.

Another good option is Credit Karma. I’m not trying to make a case for them, but I believe, based on their pedigree, you can get your credit report from them.  

All you have to do is sign up and then you can view your credit scores and other information contained in your report.

Expectedly, the information on all three reports will be similar, but not necessarily exactly the same. For several different reasons, the information on credit reports aren’t always identical.

2. Don’t Hesitate To Dispute Negative Remarks

There was a time when you had to write letters to the credit bureaus whenever you intend to dispute errors on your report.

Now, there are several different services that allows people to dispute errors online. In whatever you, just make sure you make the most out of your dispute efforts.

Some factors on your credit reports carry more weights than others. Learn about the key factors that affect your credit and the weight of each factor here.

So pay attention to factors that carry more weight first.

One easy place to start is with derogatory marks such as collection and judgments.

Collection accounts often appear on Credit reports and you shouldn’t hesitate to dispute them if they are wrong.

You can as well dispute errors via any of the three credit bureaus. If that works well for you, visit here for Experian, this page for TransUnion, and this one for Equifax.

Don’t forget that some disputes will take a longer time to resolve than others. But you shouldn’t be bothered about that. As soon as you trigger a dispute, you’re done.

The credit bureaus are mandated to look into your dispute and report the eventual outcome.

You should invest as much time as required to ensure derogatory remarks are removed from your report because they have a key effect on your entire score.

3. Dispute Wrong Late-payment Entries

Sometimes things go wrong. For instance, your mortgage lender may send a report that one of your payment was late and which you actually paid at the right time.

Also, one of your credit card companies may fail to report your payment correctly. The list of possible mistakes is endless.

Bad news is all of such mistakes add up to lower your credit score.

Good news is you can dispute late payments either in closed accounts or current accounts just as you file disputes for derogatory remarks.

Payment history have a significant impact on credit score, so don’t hesitate to file a dispute to have it corrected.

4. Go The Credit Repair Companies Way

All along, we’ve talked about how to remove wrong information from your report. However, if you want, you can also dispute correct information.

For instance, if one of your accounts end up with collection, you never made the payment, and then the collection agency got fed up. What you’ll have left is the entry no your report.

You may choose to dispute the entry like many people do. And in some cases, such entries are removed, though you ever made the payment.

How on earth is that possible?  

When you file a dispute for whatever reason, the credit bureau will send a request to the creditor to verify your claims.

Some creditors will respond. Many creditors, such as collection agencies will not. They will not respond to the request.

And once they ignore the request, the bureau is required to strike out the entry from your credit report.  

This indicates that smaller firms such as collection agencies or local lenders as well as small to midsize service providers, are not often likely to reply credit bureaus’ verification request.

It’s a stress and additional work they don’t need. However, financial institutions such as banks, credit card companies, auto finance firms as well as mortgage lenders usually respond.

So if you like, you can dispute some of such information on your reports with the anticipation that the creditor may fail to respond to request for verification.

This is one of the key strategies many credit repair companies use to increase their clients’ credit scores.

Once the creditor fails to respond, the entry is deleted.

5. Ask Politely

Perhaps you’ve made attempts to get rid of a negative comment, a late payment, or an account that was labeled “Paid as agreed” (this indicates that the creditor has decided to let you make a lesser payment than what you actually owed).

But should you give up on such situations? No. You should ask again. Nut this time, do it nicely.

Don’t be surprised to learn that creditors can ask bureaus to remove one or two remarks from your report whenever they want.

So if you end up in a situation where you tries several things and nothing works, reach out to your creditor and ask nicely. You’d be shocked by how a nice request for help turns out positively.

6. Raise Your Credit Limits

Your credit card utilization is one of the key factors that weigh significantly of your credit score. The ratio of your available credit to credit used carries a huge weight.

Typically, carrying a balance that is higher than 50 percent of your available credit will have a negative effect on your score. Maxing out your cards isn’t good for our score.

One of the effective methods of improving your ratio is to make down payment for your balances. Other options include increasing your credit limit.

For instance, if you’re owing $2,500 on one of your cards with a limit of $5000 and you were able to get the limit raised to $7,500, it increases your ratio immediately.

To have your credit card limit increased, sometimes all you have to do is to reach out to the provider and ask politely. If you have a good payment balance, many credit card companies will be glad to raise your limit.

Besides, they want you to have a high balance, that’s one of the ways they make more money.

On your part, you should ensure that you don’t use up the extra available credit so you wouldn’t fall back into the same credit ratio situation and end up deeper in debt.

7. Open More Credit Card Accounts

Opening a new account is another method of raising your credit card utilization ratio. Since you don’t carry a balance on that card, your available credit instantly rises by the card’s limit.

However, you should go for a card that won’t charge an annual fee. One easy way out is to do so with a bank where you have an account already.

Here’s the deal: cards without an annual fee seem to charge a higher interest rate. However, if you never carry a balance, the interest rates isn’t important.

However you should be smart. The essence isn’t to have access to more cash, rather it is to enhance your credit score. So if you think you’ll be at risk of running a up a new balance on a new account, don’t bother to get one.

8. Pay Down Outstanding Balances

This sounds a bit funny. But then I understand. I know you want to get a higher credit score because you want to be eligible for borrowing more money.

If you real had the resources to pay down balances, you wouldn’t bother about borrowing.

Yet when you decrease your percentage of available credit used, it can make a speedy and important effect on your credit score.  

So don’t hesitate to watch your spending to free up cash so you can pay down your balance. You can as well sell an old or unused item to raise cash for the pay down.

However, paying down balances could be a harsh strategy to execute as a short term method to raise your credit score. But you should ensure that it is part of your long-term financial strategy.   

This will not only raise your credit score as time goes on, but it will ensure that you don’t end up paying as much interest. If you look at it closely, it’s like giving lenders money you’d rather keep in your possession.

9. Don’t Close Your Old Credit Cards

The age of your credit history has a lesser but yet significant effect on your credit score.

For instance, if you’ve had a credit card for ten years, closing the account may lower your entire credit history and negatively affect your score – mostly in the short run.

So if you intend to raise your credit score, and you also intend to close a credit card account, close your newest card.

10. Pay Every Bill At The Right Time

Just one late payment is enough to lower your credit score. So do everything you’re supposed to, going forward, to ensure that you pay all your bills at the right time.

And if for whatever reason you were unable to pay on time on a precise month, you should be smart about which of your bills to pay early or late.

Your mortgage lender or Credit Card Company will surely send a late payment report to the credit bureaus. However, utilities and cell providers may not.

So you should review the “Account” section on your credit reports to find out what account is listed. And if you’re going to make a late payment for whatever reason, select an account that doesn’t reflect on your report.

Afterwards, work hard to ensure that you always pay on time in the future. Your credit score will increase and so will your bank account.  

11. Get The Help of Someone With A Good Score

For instance, if someone you trust such as a relative or a spouse has a credit card with a little or no balance as well as a good credit history, you can ask him or her to include you as an authorized user.

Using the credit score standard, you will automatically benefit from such an individual’s card available credit balance and the good payment history.   

But on the other hand, if such individual makes a late payment for whatever reason, the entry will show as a negative on your credit report as well.

So make sure you carefully choose your credit card friends.

12. Pay Off High-interest New Credit Accounts First

Your credit age is crucial to your credit report. But interest rates is important to your bank account.

So if you have $200 a month to use for paying down balances that is over and above the necessary monthly payments, you should pay attention to paying off high interest accounts.

After that, line up the rest by the age of their accounts. Start by paying off the newest first.

This is one of the most effective methods of increasing the average length of your credit – and this will increase your score. Also, you’ll be able to do without paying high interest rates.

Now you can put the money that you didn’t spend on that payment into the next important account on your list. That’s how to take advantage of the debt snowball system.   

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