Millions of adults throughout this country contend with the realities of having bad credit. Some are turned down for credit cards or vehicle loans, others learn their applications for a new home loan have been rejected. If you are experiencing the limitations that get imposed on people with poor credit, you may already know your credit is in need of repair. Today, understanding how to repair your credit score doesn’t have to be frustrating or stressful, thanks the wealth of financial information and resources available to consumers.
The first step in taking control of your credit situation is to know what is on your credit reports. You can do this by ordering your credit reports for free from www.AnnualCreditReport.com or by calling 1-877-322-8228. This service is provided by the three largest credit bureaus in the United States; Equifax, Experian, and TransUnion. The Fair Credit Reporting Act (FCRA) entitles you to receive, by request, a free copy of your credit report from each of the credit bureaus once every 12 months.
Tips to Maintain Your Credit
Credit scores are a tool used by businesses and lenders to calculate the likelihood a consumer will repay their loan. Fortunately , this rating is not set in stone. It can take time, but there are many ways you can increase your credit score.
* Pay your bills on time – Your payment history makes up 35 percent of your credit score. Missing multiple payments will quickly drop your score but since the impact of a late payment wanes over time, being careful to make all payments on time going forward will move your credit score in the right direction.
* Try to maintain low balances on your credit cards – Outstanding debt accounts for 30 percent of your credit score. The closer you are to maxing out credit cards, the less stable your finances appear. Keeping credit card balances below 30 percent of the limit will make your utilization ratio look better which will be reflected positively in your credit score.
* Avoid shifting your debt on numerous credit cards – Transferring debts to a low interest rate card is a solid strategy when working to whittle down debt, but constantly transferring balances between cards looks like you are robbing Peter to pay Paul instead of being able to make your monthly payments.
* Carefully study credit applications before accepting – Some loans, including retail store lines of credit, are loaded with fine print and other strings attached that can end up resulting in big problems down the road. For example, some no payment, no interest financing programs offered by retailers include rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest calculated during the “no interest” period.
Lastly, for people who need additional assistance addressing their bad credit, an excellent resource for consumers are professional credit repair services. Professionals can provide their valuable expertise on important matters like legally disputing the questionable negative listings on your credit report and specific steps you can take to make the most of your credit score.
More information about credit and steps people can take to improve credit can be found by visiting Lexington Law’s Credit Education resources. More information about Lexington Law can be found at www.LexingtonLaw.com
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