See Where Your Credit Report Stands

You need to see where your credit stands before you take any action. Look for any discrepancies such as other people’s information mixed up with yours. This could happen due to the credit bureau’s mistake or worse, someone has targeted you for identity theft. It is a very good idea to look at and be in control of your credit history. To view your credit report, check out our articles on getting your credit report.

Open a Checking and Savings Account

If you have a couple active bank accounts, you are seen as someone who has steady income and this provides the bank with answers to questions they may have including; do you pay your bills on time? And are you consistently using the overdraft protection?

Apply for a Credit Card

If your bank approves you for a credit card, do not allow your bank to approve you with a higher limit than you can handle. You should never reach your limit. Keep your credit use to 30% for the best possible credit and pay all of your bills on time.

Be a Part of Someone Else’s Credit

If possible, attach your name to a trusted family member or spouse’s line of credit as a co-signer. While this loan will not be used by you, the primary signer’s loan will affect your credit history. It is extremely important that you trust this person and know of his or her credit history. Be sure to request a copy of this person’s credit report. Your can build credit if you co-sign with someone who maintains positive credit.

Once you have begun to build good credit, maintain your credit by establishing a budget to pay your bills on time and consider opting for car loans, mortgages and personal loans. When you prove you can pay these loans regularly and on time, building a good credit report will be simple and will not take long to become established. 

What does your credit report look like? If you don’t know you will want to find out. Even if you have a bad credit record you can change this over time. Believe it or not, building a good credit record is not as hard as you may think. Once you get on track and know how to move forward you can build better credit soon enough.

Building a good credit record can often times be frustrating. Many people find that in order to build credit they need credit. But of course, if you stick with things you can make headway soon enough.

First things first, open a checking and/or savings account. This will not help you establish credit, but it can be used to show that you not only have money but that you also know how to manage it. For the majority of consumers this is the most obvious first step to take.

As you move forward you may want to look into opening a store credit card. But remember, just opening the account is not good enough. You must use it and then repay the money when it is due. Remember, when building credit your main goal is to show that you know how to manage your money. If you begin to miss payments you are not building good credit but instead giving creditors a reason to turn you down in the future.

Some people, no matter how hard they try, cannot get started. In this case you should seek a cosigner. For example, you may not be able to get a car loan on your own but with a parent as a cosigner you can. As long as you keep this account in good standing both you and your cosigner will build good credit.

It may seem like a lot of hard work to build a good credit record, and it can be. But remember that the hard work you put in now will pay off later when you have a good credit record and high credit score. 

Are you looking for information on credit repair and self help?  How much help do you need when you are looking for credit free repair?  Before you answer that question consider three ways to “fix” credit. 

The first way is rather obvious.  You pay off all of your debts and thus are given more credit to spend.  This is problematic for some because money is often times scarce and interest charges can be predatory.  The second way to pursue credit free repair is by negotiating with creditors for a lower price than what is stated on file.  You the consumer may perform this, or you may get help from a debt relief agency or by a debt relief lawyer. 

Is there any difference between the three?  A debt relief lawyer would have experience in this situation so might be more knowledgeable in his negotiating strategy.  Debt relief agencies may refer you to an attorney or have their own financial specialist help you on a case.  However, you must beware of some debt relief companies that are actually scam operations.  The usual model of a legitimate debt relief agency allows the debt-ridden consumer to refinance through the company.  In turn, the company negotiates with the many creditors to create a consolidated balance.  However, scam operations may simply offer to negotiate balances and not actually do anything—all the while requesting more money.

The third type of credit repair service is even more concerning—some companies will offer to create a new credit file, or a new credit identity, so you can wipe the “slate” clean and start over.  This is an absurd promise, and you should hope it’s a scam.  Otherwise, you may be committing a crime.  There is no way to fix a repair file other than to satisfy your creditors.  The credit bureau merely reports on what financial transactions have been taking place.  The individual creditors have the most power to remove an item.  Only by legal dispute can a credit bureau remove items from a credit file.  This can only be done after a thorough investigation into the matter.  If you want to dispute charges, be sure to provide as much evidence in your favor as possible.

If you want to repair your credit it’s time to start analyzing your credit history.  You can do this by requesting a free copy of your file from any or all of the big credit agencies, Experian, Equifax and TransUnion.  You are legally entitled to one free review every 12 months, as well as unlimited access through one of the commercial providers.

You may also want to check out our tips at: 3 Things You Can Do Now To Improve Your Credit Score.

There are plenty of options available to you if you have bad credit.  However, are they really worth it?  Some of these options may end up costing you much more money than legal credit repair would.  Independent lending companies that offer bad credit loans often subject their borrowers to predatory lending.  They insist on high interest rates, strict terms and not much room for negotiation.  Payday loans have low limits and must be paid back immediately.  Car title loans and Refund Anticipation Loans are also flawed, mainly because of their high interest rates as well as the high-profit scheme of the lending companies.

In some cases, it really pays off to invest in credit improvement.  How can you work to improve your credit when you’re thousands of dollars in debt?  You may pursue a solution in the way of refinancing, negotiating with creditors or disputing charges on your credit report.  When it comes to debt consolidation, this is a profitable idea that you may want to consider.  However, investigate the company you are working with thoroughly.  The mission of a debt relief agency is to refinance a loan while negotiating with creditors for a lower payoff.  This way, they can consolidate all of the consumer’s bills into one convenient payment.  Without refinancing, this option is useless.  You can try negotiating with creditors on your own.  All that a debt relief company or credit score repair attorney can do, short of taking on your debt, is inform you of any illegal items listed on your credit report.

Some creditors may be willing to reason.  Creditors have been known to drop a consumer’s dated charges just to keep the customer happy.  If you are in major debt, then this may not be an option for you.  However, you can pursue credit improvement by negotiating terms with your creditors as to how much you can send. 

What about the matter of credit disputes?  This is definitely an area of credit improvement that needs attention.  You can contact the creditor directly or the credit bureau for more information.  You will be required to dispute the charges in writing and give the bureau about a month or so to respond.  As per the Fair Credit Reporting Act passed, the bureaus are required to investigate your dispute claim at no charge to you.  Know that the same act also made it illegal for consumers to take advantage of this system and dispute a charge that is obviously valid. 

Credit improvement is an investment that pays off.  Your negative items are stored for seven years (or ten for bankruptcy) and then wiped clean.  If you make an effort to pay off your most important bills one at a time, you will be returned to a clean slate and be respected by all major credit companies.  This will mean better terms, with lower interest rates, more generous time frames and lower monthly prices.  Having good credit saves you money!

According to the folks at Fair Isaac, one of the biggest factors that affects your credit score is your history of paying debts.  If you have one or more debts that are in “collections”, your credit score has probably taken a big hit.

So it makes sense that if you were to pay off the bad debt, that your credit score would rise. 

Unfortunately, that is not always the case.  Here’s why.  If you negotiate with a creditor to pay off an old debt, the creditor will happily take your money and list the debt as paid off on their books.  However, they will not necessarily ask the credit bureaus to delete the debt from your credit history.  In fact, they most likely will NOT ask for the debt to be deleted.  It will continue to show up as an “uncollected” item on your reports for years, continuing to hurt your credit score.

So what can you do?

Here’s one (important!) tip that you can use when settling old debts—as a condition for paying the debt off, demand that the creditor ask the credit bureaus to remove or delete the account from your credit reports.  That’s right, tell your creditor that you will pay off the old debt, but only if the fact of the old debt is eliminated from your credit history.

This simple tip will usually cause your credit score to skyrocket. 

Your credit score is a measure of your financial reputation and is based on the credit history that has been reported by your creditors to the credit bureaus.  Only actions that are reported to the credit bureaus affect your credit.  Because of the way credit scores are calculated, some actions affect your credit score more than others.  In general, paying your bills on time and meeting your financial responsibilities will have the biggest impact on your credit score.  Other actions, such as not being overextended with credit also affect your score.  The credit score algorithms reward people who have demonstrated an ability to repay their debts, and who do not appear to be a financial risk.

Here are three tips you can use right now to boost your credit score:

1. Pay Your Bills On Time! This should be a no-brainer.  To boost your credit score, you need to pay your bills on time.  Responsible repayment of debt is the single biggest factor that affects your credit score.  The credit score algorithms figure that if you have a history of paying bills on time, that you will continue to do so in the future.  Experts estimate that up to 35% of your credit score is based on your paying of bills on time.
2. Don’t Get Overextended Lenders want to know that you will have enough money left each month to pay them back.  If you have many lines of credit or several huge debts, you make a worse credit risk because you are close to “overextending your credit.” This simply means that you may be taking on more credit than you can comfortably pay off.  Even if you are making payments regularly now on existing bills, lenders know that you will have a harder time paying off your bills if your debt load grows too much.  The credit score algorithms take your debt load into account.  If you have too much debt, your score will plummet. 
3. Pay Down Existing Debt This is related to tip number 2 above.  If you have a lot of debt, your credit score will suffer.  Paying down your debts a manageable level, and your credit score will improve.  For example, if you have a $1000 limit on your credit card and you regularly carry a balance of $900, you will be a less attractive credit risk to lenders than someone who has the same credit card but carries a smaller balance of $100 or so.  If you are serious about improving your credit score, then start with the largest debt you have and start paying it down so that you are using a less large percentage of your credit total.  In general, try to make sure that you use no more than 50% of your available credit.  That means that if your credit card has a limit of $10,000, make sure that you pay it down to at least $5,000. What counts here is what percentage of your total credit limit you are using - the lower the better.

It happens all the time.  It’s frustrating, and can lead to credit problems if you don’t take action (and we never want credit problems!  They turn into credit score issues eventually).  Here’s the good news: These errors can be corrected. Here’s how. 

Correcting billing errors on credit card, private label card, and other revolving credit accounts takes some patience and familiarity with the dispute settlement rules provided in a Federal Law called the Fair Credit Billing Act (FCBA).

Here’s how you dispute a credit card charge (also known as a “chargeback"):

First, make sure the charge is a type of charge covered by the FCBA: 

• Unauthorized charges (Federal law limits your responsibility for unauthorized charges to $50);
• Charges that list the wrong date or amount;
• Charges for goods and services you didn’t accept or weren’t delivered as agreed;
• Math errors;
• Failure to post payments and other credits, such as returns;
• Failure to send bills to your current address (so long as you provided the creditor with a written change of address, at least 20 days before the billing period ends;
• Charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.

• Write to the creditor (bank) at the address given for “Billing Inquires”, do not write or send to the address where your payment is made. Include your name, address, account number and a brief description of the billing error or problem.
• Send your letter by registered mail. You will then have proof the letter was sent on a specific date. Send copies of any supporting documents, receipts, etc. (not originals). Keep a copy of the entire document sent. 

*Important! --You need to make sure your letter reaches the creditor within sixty (60) days after the bill containing the error or contested charge. The creditor must acknowledge your dispute, in writing, within thirty (30) days of receipt unless the dispute has been resolved. The creditor is bound to resolve the dispute within two (2) billing cycles (but not longer than 90 days) after receiving your letter.

In some situations, you may be able to dispute a charge online (at your bank’s website).  Check your banks website to see if they have this feature (it is a great time saver).

Here’s what you should expect if you take the steps above (and the dispute is valid).  By law (under the FCBA), the credit card company must credit your payment to your account the same day it is received. If a credit card company is found to have not done so, in addition to being subject to fines by auditing authorities, it cannot charge you interest for the period in question nor can it assess you late fees or additional charges. 

Don’t pay for fraudulent charges or billing errors!  Make sure to check your statement regularly, and act quickly to fix any errors.  Your credit score will thank you!

Are you looking for a credit fix report?  Fixing your credit can be complicated, especially if you are disputing some of the negative items that are appearing on file.  What is the best way to approach this credit fix and report situation?  The first step is to get a copy of your credit file.  This can be done by contacting any or all of the three major credit bureaus: Experian, Equifax and TransUnion.  You may be offered pay services or a free annual credit report, as provided by the Fair Credit Reporting Act.  Try and look for a tri-merge report, as this report gives information from all three bureaus.  If you focus all of your attention on one, you may be missing out on other items, since this information is not standardized. 

After you review your credit fix report it’s time to report any suspicious activity you find.  It has been known to happen—errors have been made by the bureaus and by credit companies, as have cases of fraud.  Though it is not your fault, these debts can do major damage to your credit rating.  Unless you check your credit history on a regular basis, how can you know if you are being charged erroneously? 

Once you identify negative items on the credit fix report you can write out your dispute.  It may be best to try and contact the creditor first, especially if you recall having dealings with the company but don’t remember the charge.  Creditors have the right to remove any charges to a credit file, even beyond the power of credit bureaus.  However, in many cases many consumers have no choice but to contact the credit bureau directly.  Depending on which bureau you write (and you may have to write to all three) you may write a letter of dispute, call in a dispute or send a dispute online. 

Explain your case thoroughly and provide as much information as possible.  No one has ever been rejected for being too thorough, though there are plenty of cases where consumers have disputed charges with no evidence to produce.  Try and send the letter through certified or registered mail and document all communication with the bureau.  It may take about a month or so for the bureau to contact you, so be patient.  Remember though, that there is no charge for a second investigation.  If you have new evidence that could help your case then appeal, appeal, appeal!  This is the best way in how to fix credit reports.

Are you looking for ways to repair your credit?  You may have run across some bad credit repair services that have piqued your interest.  What is it exactly that these services do?  Before you consider this, and whether or not you should hire someone else to repair your credit, first review how bad credit works.  Bad credit, or adverse credit, results from having too many negative items on your credit report.

Once a potential lender sees this poor rating on your report they may be less inclined to offer you a fair deal.  This is because, historically speaking, you are a high risk to them.  Who makes this judgment?  The credit bureaus record the information and compile the score; however, they get all of this information from their own data furnishers, which consist of a multitude of creditors.  Creditors report all sorts of factors, including outstanding balances, late payments, credit limits and stability.  They also report any aggressive actions that are taken in order to recover outstanding debts, such as delivering the account to a collections agency or filing for a civil judgment in court.

For a time, there was no such thing as a credit score.  It was invented in order to summarize a borrower’s risk in numbers, because personally evaluating a person’s credit proved to be too time consuming for most retail lenders.  Credit scoring can be very impersonal.  It is created via a proprietary mathematical algorithm that states a person’s creditworthiness.  The score ranges from 300-850, the lowest number being the least creditworthy.  Not only does the system analyze the debt itself, it also compares the history to other debtors, creating a sense of “normalcy” among America’s shopping habits. 

Now what should you remember when you look to purchase bad credit services or credit repair software?  Software will only expedite the process of negotiation and payoff.  There is no legal way to start a new credit identity.  This is different from a process of re-aging a file, which the Federal Financial Institutions Examination Council (FFEIC) regulates carefully.  Bad credit repair services may offer assistance in negotiation or even in refinancing.  However, aside from these actions there are no way that they can instantly improve your credit.  The secret to improving your credit is to start with good credit habits, and consider taking action to remove negative and erroneous information from your credit report. Why not get started by ordering a free online credit report today?

When credit problems get bad, how should you go about finding a credit attorney?  First determine what exactly the problem is and what you expect a credit attorney to do about it.  If the problem is that you’re in debt with legitimate charges, then don’t expect a credit attorney to work any miracles.  What will most likely happen is that you will either get an education in how to manage your money (which is available online or in the library for free) or you will be offered debt relief services.  Debt relief services are when a company (or their associated lawyer) speaks to creditors on behalf of you, hoping to talk them down to a reduced payoff.

If this is the type of lawyer you are looking for, then make sure that you are dealing with a reputable firm.  Recently, there have been numerous reports of scam artists impersonating real debt consolidation companies.  You can usually tell if this is the case by the statements that the company or attorneys make.  They want money upfront and promise you either too much or too little.  Real debt consolidation companies refinance your consolidated debt.  This is the primary reason to get involved with them.  If a lawyer can help you with this aspect of credit, and if he had affordable rates, then it may be an option worth considering.

Finally, you have the disputes credit attorney, who specializes in communicating with credit bureaus over false charges.  Whether these charges are due to fraudulent activity or a computer error is irrelevant; this lawyer is fighting for your right to remove any illegal items from your credit report.  In considering how to find a credit attorney such as this, start by carefully examining the attorney’s experience.  You can do this by looking over their company website and by speaking to the attorney during a free consultation. 

Just remember that like all legal professionals, experienced credit repair attorneys can charge an hourly rate of anywhere from $75 to $300 per hour or more.  You need to have a strong case if you want to bring forth litigation against any of the big three credit bureaus or an independent creditor.  Before you pay any fees try to exhaust all possible contact with the credit bureau itself.  After all, you can appeal to the credit bureaus repeatedly with no extra charge.  However, if you are convinced that the credit bureau is unwilling to help you and your credit has been illegally destroyed then you could have a strong basis for a lawsuit on your hands.