To understand the credit repair process, at first you need to know what the term “credit” is.
“Credit” can be defined as a contractual agreement between two parties, in which one party
receives value of something (e.t. money) from another party and agree to pay it to them later
usually with interest.
Another term is important to understand the credit repair process which is called “Credit score”.
Credit score is shown in basically three digits, ranging between“0-999”. It is used to check the
history of the borrower before lending the value to know whether the person or company is able
to repay the debt or not. Also, it is important for lenders such as credit companies or banks to fix
the interest rate and credit limits. If a person or company has a higher credit score, it means there
is low risk in terms of lending money repaying debts.
Now the question is “What is the credit repair process?”
Credit repair process refers to the idea of repairing or improving the inaccuracies or negative
features (e.t. identity duplicity, incorrect address, incorrect personal information etc.) of an
individuals or company’s credit history. Through this process, a borrower who has a lower credit
score can be able to get loans with better interest rates.
So, to get a higher score in your credit and regain financial stability you need to repair your
credit by yourself or professionals. Here, some important steps that you can follow to fix your
credit are-
Reviewing Reports Regularly
First, you need to get a copy of your credit report. There are three major credit bureaus: Equifax,
TransUnion, and Experian. To get a free report, you can visit AnnualCreditReport.com. Some
important errors like incorrect personal information, duplicate accounts, late payments or
fraudulent activity should be reviewed.
Disputing Errors and Follow Up
You need to contact the credit bureau and provide them with necessary evidence as early as
possible after identifying the inaccuracies in your credit. Also, you need to be aware of the fact
that proper investigation and corrections have been done by the credit bureau.
Maintaining Payment History
Outstanding performance in paying bills on time adds a good score in credit. On the contrary,
unpaying debts spreads negative impacts on credit. So, to avoid late payments you can use some
softwares that can remind you on time.
Proper Credit Utilization
Reducing credit utilization is one of the important strategies of maintaining a good credit history.
Experts suggest that you should not use more than 30% of your credit limit. You can increase
this percentage by paying off your debts properly and increasing credit limits.
Becoming an Authorised and Responsible Credit User
Be aware of being an authorised credit user for a new credit card holder. Also, be a responsible
account holder if you need to open a new bank account.
Avoid Closing Old Accounts
You should know that closing old accounts impacts negatively on your credit score. So, avoid
closing accounts frequently.
Monitor Credit Reports
Try to check your credit reports on a regular basis to identify potential issues and track the
progress.
Seeking professional help
To get better results in the credit repairing process without having much hessel, you can take
professional help and guidelines from different credit companies. However, you need to choose
reputed companies, as credit information is very confidential for everybody.
Credit repair is not a matter of worry if you follow its step by step procedure with patience and
consistently. Having a good credit score can be compared with the key to success, as nowadays
getting a loan with good interest is very essential for people in money making especially in
business. So, to get better financial opportunities in future, start implementing credit repair
strategies.