Credit Repair: How to “Fix” Your Credit
Whenever we think about our financial life the one thing came to our mind is “credit score”. It plays an important role in the loan application process. Repairing credit is not that much easy. There is no quick way to fix credit score . In fact, the quick fix credit repair ideas backfire, so beware of these kind of advice. The best way to repair your credit score is manage it responsibility over time.
Credit Repair Organization Act
The CRO act is a federal act which became effective from 1st April, 1997. It was made with a clear objective in response to the consumer who are suffering from bad credits. The law ensures that the credit repair service companies are :
Prohibited to take money from consumer until they completes the they have promised.
As per the law the credit repair service company have to made written contract in which they have to mention the service they will provide with the terms and conditions of payment.
They can not ask you to sign anything that forfeiting your rights under the credit repair organization act.
They are forbidden to mislead credit reporting companies about the credit accounts.
How to fix credit score by yourself
Well it is not important to always hire credit repair service and spend hundreds of dollars for credit score. As we have discussed there is no shortcut method to improve your credit score, it is slow process and take time to raise. To repair your credit score you have to work like as follows:
1. By checking your credit report
To understand better about your credit score you have to check your credit report every time.
If you find difficulties in understanding your credit report you can take help from our team.
You should have general information about credit report.
If you find any information incorrect, you can file dispute against that.
2. Improve your credit history
Credit history is one of the most important component of credit score. Late and missed payments can reduce your score , also it can damage your public score. And this negative information can affect your credit record up-to 6-7 years.
Bringing account current and making payments on time can leave a positive impact in your credit history.
3. Know your credit utilization
Well it is the sum of your revolving debts such as your credit card balances divided by total credit you are available with . High credit utilization rate can leave a negative impact on your credit score. Well generally it is good to keep your credit utilization rate under 30%. Moreover there are two ways to reduce your credit utilization rate:
Reduce your debts.
Increase your total available credit y increasing the limit of you credit card.
While we talking about increasing your credit limit can be little risky if increasing your credit limit tends you to use more credit. Beside this reducing your balance in credit card and other credit revolving accounts can also help you to maintain the credit utilization rate in limit. On this basis paying your debt on on time can also help you for positive credit history.
4. Consider all the credit Account
Raising your credit score also consider how much you owe and how many different account you use. If you have debt in many accounts paying off them can also help you to raise your credit score. If you have aged accounts and using from years it can be a plus to you.
5. Credit History
Well think about your credit history, credit scoring models like FICO often factor in the oldest account and the account you used from years. So always before closing any account think about its credit history. If you have inns and out of your financial situation can help you a lot in this.
6. Prudent of New Credits
Opening several credit account with small amount can look risky to the lenders and also can be act negatively on your credit score. So before opening a new account and opening a new credit account think twice about its effect.
Don’t worry if you have just started the work of raising your credit score. TO raise your credit score one should not be panic but think cleverly and act cleverly to make good credit