How To Fix Your Credit

Credit Repair is a consumer's right under the Fair Credit Reporting Act to dispute credit history items disclosed in a Credit Report. Credit Bureaus will investigate, and remove Erroneous, outdate or unverifiable errors at the consumer's request. But accurate information cannot be removed.

Since the economy is down now a days more and more people are getting into debt. Our credit controls many things in our lives such as; it limits or expands our purchasing power, affects our income by the interest rates, it expands or limits our financial stability, and it also opens and closes doors for employment opportunities.

Most people out there don’t know much about credit scores, so here is a little something people who are searching for credit repair should know.

The FICO score – is a numerical rating which was developed and is maintained by the Fair Isaac And Company. This FICO score is an indicator of a borrower’s credit worthiness based on a simple criteria. This score also is the basis on which many lenders will decide to loan money to you.

Basically the FICO score is divided into 5 main parts:

Ø 35% Payment History

Ø 30% Amounts Owed

Ø 15% Length of Credit History

Ø 10% New Credit

Ø 10% Types of Credit Used

Inquiries and the Harm they Do to a Credit Report

There are two types of inquiries, Soft Inquiries and Hard Inquiries. Hard inquiries are records of someone checking your credit report that affects your credit score. From a hard inquiry your credit score usually drops 5 points per every hard inquiry. People get hard inquiries by applying for loans and credit cards. The time limit of hard inquiries to stay on your report is a minimum of 2 years. Soft Inquiries are made when you pull a credit report yourself or from a consumer site do not count. Soft Inquiries do not really hurt your credit score.

Some people are able to remove hard inquiries success fully off their credit reports by doing a soft inquiry everyday. You can do this by using a credit monitoring service which allows them to make daily soft inquiries. Removing your hard inquiries this way only works on two out of three of the credit bureaus, TransUnion and Equifax. It is important to remove hard inquiries from your report in order for your credit score to rise higher. To most companies, if a person has many hard inquiries the borrower may be considered as a desperate to obtain credit.

How Long Negative Items Stay On Your Report

Ø Delinquent information such as late payments and collection have a credit reporting time of seven years from the date of delinquency.

Ø Charge-offs have a credit reporting time of seven years plus 180 days from the date it was reported to the credit bureau.

Ø Foreclosures also have a credit reporting time of seven years.

Ø Judgements or Law suits have a credit reporting of seven years from the date of the judgement or law suit being filed.

Ø Bankruptcy has a credit reporting time of 10 years from the date of which you filed it on.

Ø Tax Liens also have a credit reporting time seven years from the date on which they were paid. Unpaid tax liens may stay on your credit report for a time period of 15 years.

* Depending on your case these times may be less. For example, there are many types of bankruptcies.

The best advice I could give to people is fix your credit now before you waste hundreds, if not thousands of dollars.

Here are some steps to take, if you are planning on repairing your credit on your own:

Ø Obtain a copy of your credit report from all 3 of the credit bureaus and review your report for erroneous, unverifiable, or outdated information. Once contacting the bureaus they will tell you how to dispute these items.

Ø The second thing you should do is start contacting your creditors. If you have contacted the bureaus and they have said that the creditors have verified the information which you think is outdated, erroneous, or unverifiable you need to contact the creditors directly to argue your case. If you manage to succeed to getting the creditor to remove the negative item, make sure that you do get a letter from your creditor saying something about that error they have removed.

Ø The last thing you should do is keep all and every record you get such as all the paperwork that are used in making your disputes or investigations. Using this proof you can show them to the credit bureaus if you did not manage to succeed in removing the negative item through your creditor.

The last and final thing, if you think this work will be too much for you to handle. There are other ways of handling these situations. You could always hire a credit repair firm to help you remove all the negative items off your report. Also, I, myself have been going through credit problems lately and I decided to hire a credit repair firm. It may be a little costly but there is a saying what you pay for is what you get! So people who really care about their credit and future, I suggest you should get on top of things ASAP. Below is a credit repair firm I found really helpful, they got all my scores up to nearly 730. Amazing, I know but there are many people going through these problems right now. So, make the right financial decision today!