Credit score, being a numerical score based on the analysis of individual’s credit file to indicate the quality of their creditworthiness. Its mainstay in your credit report, the information serves as a reflection of your credit history pulled directly from the credit bureaus Good credit score is a sign of financial status that helps one avail benefits like home loans at low interest rates. But, there are things that can be the reason of damaging your credit score. Credit repair is the process of repairing a damaged credit report. This post will solve your query, what is credit repair and how does it work so you can get out of debt.
How Credit Repair Works
Credit repair is the process of reviewing, identifying and correcting errors on your credit report that are affecting your credit score. These issues may be untrue, old, or fraudulent on your report. So provided you do it smartly, you can certainly enhance your credit score in time. To start your credit repair, you should do the following:
Steps to Repair Your Credit
1. Access to Your Credit Reports
No matter if you are trying to keep a good credit standing or fighting for credit repair, firstly; you need copies of your credit report. First, you must request a free report from all three major credit bureaus (Equifax, Experian and TransUnion) annually. Going through these reports will clue you in as to what may be affecting your score so you can begin fixing the things that need improvement right.
2. Review All Reports
With your credit reports in hand, scrutinize each one for errors. Some of the common issues are:
- Open accounts that were neverclosed.
- Accounts that are not yours.
- Personal information mistakes like name or address.
3. Perfidious Errors- steps for fixing
Use complimentary fraud services to spot errors and mark error edits, write off negative marks with creditors. Improving credit score by talking with your creditors may take time, but you will as in the end resembling a plan.
4. Push Back Wrong Information
False information such as incorrect account numbers or names can severely reduce your credit score. Errors caused by identity theft report them to your credit card company and use the government aid to remedy it.
5. Keep an eye on responses and circle back
Credit bureaus under the Fair Credit Reporting Act (FCRA) must investigate a dispute within 30 days. Keep your guard up by keeping track of responses and next steps. Do not settle with the outcome, file new dispute with more material.
6. Stay away from Late Payments
A late payment has very devastating effects on your credit score. Remember to always pay on time, since 30 days (for most creditors) is when they report late accounts. If you are late, paying within this window can help stop the damage to your score.
7. Leave Your Old Credit Card Un-closed
Do not close old credit accounts this eliminates a part of your credit history. Closing an account with a 7 year old history means you will lose the length of your credit history and raise your credit utilization rate. Your score is lower utilization rate is good for you
Why Strategic Credit Repair Matters
By doing these things you will figure out your credit problem and how to handle it. As per me, if the plan has been well thought out the results shall be better. Stick with the plan, track your progress and continue working on building a great credit score.
This guide on what is credit repair and how it works will get you to a better financial future with ease. Keep consistent and your credit score will catch on the efforts.