How to fix past credit mistakes
Urban myths- We hear them all the time. One
that comes to mind: ...credit repair companies can instantly solve credit
problems.
Most of the myths are harmless fun; but
when it comes to your credit, you could lose money and break the law if
you don't know the truth.
Some credit repair companies make promises
about turning bad credit into good credit. And while it may sound enticing,
don't be fooled. Truth is, nobody can legally remove accurate and timely
information from your credit report. You should be skeptical of any company
that claims they can do a quick fix to your credit.
In fact, the Federal Trade Commission (FTC)
is continuing its crack down on credit repair schemes. Eileen Harrington,
Deputy Director of the FTC's Bureau of Consumer Protection, is part of
the project. "There is absolutely no reason to pay for credit repair,"
Harrington said. "Despite their claims, there is nothing that any credit
repair firm can do for you for a fee that you cannot do for yourself at
little or no cost."
So, what can you do if you want to improve
your credit? Here are some suggestions: Identify harmful habits Order your
credit report and look for any problem areas that jump out at you. If you
see that you have a bunch of late payments, what can you do to make sure
you pay on time? Or, if you notice that you have credit card balances close
to your limit, you should try to pay those balances down first. And, do
you have several hard inquiries on your report? This could mean you're
applying for too many credit cards.
Set measurable goals-Once you decide you
want to tidy up your credit and know what you have to change, it's a good
idea to set goals. That way, you can track your improvement. Plus, when
you reach a goal, you'll have reason to celebrate.
One of your goals might be to improve your
credit score by 50 points or get your score above 650. In general, a score
of 650 or higher will help you qualify for better interest rates on loans.
You can see how you're progressing by checking your score every three months
or so.
Be realistic - Let's face it, our dream
house and what we can actually afford are usually two different things.
When you're applying for a mortgage or any big loan, it's important to
be honest with the lender about your current financial standing. Otherwise,
you may take on a mortgage that's too much to handle, and you could overextend
yourself.
The biggest thing you need to improve your
credit health is the right attitude. If you believe you can do it, then
you will do it. And remember, credit mistakes aren't set in stone, negative
records will expire from your credit report. With time and a little effort,
you can fix those mistakes.
Author-Bio: TransUnion's TrueCredit.com
has helped millions of consumers manage their own credit health. TrueCredit
provides all the information individuals need to manage their credit. TrueCredit.com
products include online credit reports, credit and insurance scores, credit
monitoring, debt management tools and identity theft insurance, all designed
to help individuals achieve greater financial well-being. http://www.truecredit.com/ |
