What You Need to Know About Credit Repair
Since many entities use credit scores to decide whether to do business with you, it can be challenging to navigate through life with a bad credit history. For this reason, consumers with bad credit may decide to take steps to salvage their credit history and by extension their financial situations.
In that vein, here is what you need to know about credit repair.
Removing Negative Credit Score is Hard
Improving a negative credit score can be challenging. However, you can’t give up. Note that credit bureaus can only remove unverifiable or inaccurate information. It is tough to do away with accurate but negative credit information, and credit bureaus have the right to report it.
Closing Accounts and Opening New Ones Won’t Help
There is a false belief that only open or active accounts are included in credit histories and closing such accounts will remove the negative impacts. This is untrue, and in fact, it can hurt your credit score in some cases. Thus, even if you close your account, the negative credit score will remain on the list. Closing accounts can increase your credit utilization ratio, which will negatively impact your credit score. In such cases, you’d be better served by a debt relief company, which can help you pay off those debts at reduced cost. You can more information on that from FreedomDebtRelief.com.
Leaving the account open is vital for credit repair, especially when it has been open for a long time and can be put in good standing. All you need to repair your credit history is to have open and active accounts with good payment histories. It’s easier to rehabilitate existing accounts than “build” new ones.
Be Careful with Credit Repair Companies
Some credit companies make lofty promises that they can’t fulfill just to exhort money. They charge an expensive upfront fee but fail to deliver good services. Although this is illegal, unsuspecting victims may not realize they are being taken advantage of. In this regard, the Federal Trade Commission has pursued and banned several credit repair companies for breaking the law.
Some of the indications that you are dealing with exhorters include:
- Excessive upfront fee requests
- They promise specific credit scores
- Offer to delete accurate negative information
- They do not inform clients of their right to dispute information directly to credit bureaus
- They may ask you to waive your rights under credit repair rights
Be Patient, Do Not Anticipate Overnight Results
It takes a lot of time and patience to build a good credit history. It relies more on recent credit activity than older items; therefore, the mainstay is months of on-time payments. Although this is a step in the right direction, it does not offer instantaneous positive impact; it is relatively progressive. With time, you will see negative information get older with drop off.
Have a Positive Change
Lexington Law encourages clients to develop new positive habits. Always adopt practices that can build positive credit histories. Always request what you can realistically pay — or even less. Always pay your bills on time since credit lenders always want to know if you are meeting your financial obligations.
Consider No Intervention
Negative information doesn’t always last forever on a credit report. Although most negative marks last less than seven years on your report, some can remain longer. For instance, bankruptcy can be on your credit report for up to 10 years.
In conclusion, credit repair is a straightforward process. You just need a whole lot of patience and deliberation. Fortunately, you now have what you need to know about credit repair; thus, you can get going in earnest on your report.
“Pop culture advocate. Troublemaker. Friendly student. Proud problem solver.”