Increase Credit Scores - Bad Credit Repair Tips
Don't Waste Money on a Credit Repair Service
Nov 14, 2009
It is imperative that those who have missed or made late payments seek to increase credit scores prior to applying for a loan, mortgage or credit card. A consumer with a bad credit history will pay a far higher rate of interest and be confronted by the likelihood of a decline. Whilst there are genuine credit repair tips out there, credit repair services should generally be avoided. Some services even promise clients' a brand new credit report, but the attainment of credit under false pretencss amounts to fraud. Although it is a multi-million dollar industry, they provide little practical benefit to the struggling consumer.
Increase Credit Scores - Correct Inaccurate Information Through a Credit Attorney
The Consumer Data Industry Association (a trade group that represents the credit reference agencies) stated that about 3% of all credit reports contain erroneous data. The Fair Credit Reporting Act 1970 allows for the correction of inaccurate data; this can be performed personally (with appropriate supporting data) or through a credit attorney. It can take anything up to six months to get any issues corrected so it is imperative that those applying for a loan do so with plenty of time to spare. With the exception of credit cards, any amendments must be performed through the credit reference agency, not the creditor.
Other Credit Repair Tips to Increase Credit Scores
- Avoid multiple credit searches. When applying for loans, don't make multiple credit applications. Each search will show on a credit report for 12 months and will reduce the likelihood of acceptance.
- Don't max out charge cards. Whilst a 0% credit card balance transfer can help to reduce debt, putting all the money owed on a single card will not be construed positively. Make an effort to reduce the outstanding balance and/or spread any money owed over several cards - not just one.
- Make timely payments. Even if missed and late payments are an issue, paying on-time now and in the future will help to increase credit scores considerably.
- Close old accounts. Don't leave an account open if it isn't used.
- Build credit through specialist financial products. Take out a poor credit history credit card and make timely repayments on it. They will report to credit reference agencies and this will help to improve credit ratings considerably.
How to Increase Credit Scores
An improved credit rating takes time to achieve - it will not happen overnight as many credit repair services promise. Genuine bad credit repair takes time, but reliably making repayments on existing credit agreements could lead to acceptance in just six months. Even those who have filed for chapter 7 bankruptcy may be able to get a mortgage three years after discharge. Apply for credit sparingly and get a free credit report to get any errors corrected.
Sources
Tedeschi, Bob (2009, April). "Faulting Credit Firms on Fixing Errors." The New York Times.
 |
 |
 |
 |
 |
