Are you worried about your poor credit records? Have you fallen into the bad credit bracket and you are unable to get any loan since you have become a risky proposition? Do not worry, you can change the picture within one short year with four foolproof steps. However, before you learn about these steps, you need to look back seriously and analyze why do you find yourself in this predicament.
The most important step in dealing with a bad credit record is to accept that there is a serious problem with your financial planning and management. Unless this changes, you will land back into trouble again.
Repairing Credit Legally Is Easy
Never go for credit fixing that so many unscrupulous companies advertise on the Net. The majority of these ‘fixing’ companies are scams. Instead, take positive action and clear your name with four simple steps:
1.Ensure that your credit report is accurate – most of the credit reports have a certain number of inaccuracies that filter with time into it. You would need to ask for a free copy (you are entitled for one copy per year – and there are at lest three to four companies which give these reports free) and then go through it with a very fine comb.
As soon as you find anything that could be contested as inaccurate, write to the bureau. According to the law, the credit company needs to prove that such a claim is correct in 30 days or permit its removal. Many credit companies find this task a waste of time and money and do not contest it. If so, you could wait for 30 days and then ask that the item be removed from your credit report.
For best results you would need to write one letter for each of the inaccuracies you find and then ensure that you follow it up closely.
2.Increase you savings – start saving. Ideally about 15-20% of your total income should be kept aside for ‘rainy days’. In case you cannot put aside this amount, put any anything you are comfortable with – but ensure that you save. Savings is a great credit score enhancer – the more you have, the better.
3.Pay all your debts before the due date – if the due date in on 10th and you pay on 11th – you are late. The credit bureau would not see that you are only one day late; they would see that you are late and that hurts your credit record. Ensure that your payment are regular and before the due date.
4.Ensure ideal Income-debt ratio – ideally one should not be indebted by more than one third of their take-home income. This narrows the limit quite bit a bit, but it can be done if you plan and manage our budget wisely.
Ensure that the above four points are covered and followed strictly for about one year – and you are back in business. Remember, to stay out of debt and maintain a good credit record once you are back in the clear. |