The Basics of Credit Repair

By having a credit, you are using someone else’s money
as payment for your purchases. In addition, it also
indicates that you are swearing to repay the money to
the agency or person that loaned you the amount.

If you are applying for a loan, credit card or
mortgage, it is normal for the agency to check your
credit worthiness. This is essentially based on the
assessment of your credit history, thus helping them
determine the possible risks of the deal and decide
the terms of the loan. Positive assessment means good
financial background, which increases your chances of
applying a credit.

The Credit Repair

The process wherein consumers with poor credit
histories try to reestablish their worthiness is
called the credit repair. It involves procuring the
credit report from agencies and taking careful and
appropriate steps in addressing apparent issues,
including omissions, misreporting, misinterpretation
or other inaccuracies.

If there are any discrepancies found in the credit
report, the consumer is entitled to dispute the errors
that unjustly harm their financial healthiness and
credit worthiness. There are several laws and
regulations that are designed to guarantee fair and
legal undertaking of the credit report process. These
laws can be used to legally and formally start the
process of credit repair.

Every consumer is entitled to one copy of credit
report each year from each credit reporting agency.
Investigations with regards to the real nature of the
inaccuracies and errors are possible and necessary for
a successful credit repair.

What influences your purchasing power and eligibility
of availing any credit facilities in the future is
your credit record. You should keep in mind that a
good credit score can help in several purposes, such
as: mortgaging a home, buying a car or applying for a
job. On the other hand, a bad credit score can make
you vulnerable to exorbitant interest rates and
unnecessary loan terms from several companies. These
two facts are important in helping you understand why
maintaining a good credit score is vital.

How to Repair Your Credit

The process of credit repair can be achieved through
hard work and discipline. Easy methods, which can help
you get out of poor credit history, can be quite
tempting. However, these easy way outs can only lead
to further difficulties in the future especially if
they are done illegally.

In case your poor credit history is caused by
circumstances beyond your control, you can always
request for an upgrade in your credit rating to your
creditor. However, this can only be done if you were
able to make amends to your credit records after the
circumstances.

Creditors do not normally trust consumers who default
on their payments. This can pose a difficulty to you
in obtaining a new credit. However, once you are able
to demonstrate enduring stability in your income and
prompt patterns in your payments, the situation can
improve in the span of two to three years. This way,
even though there is a case of bankruptcy, you are
likely to be eligible for credit cards within two
years if the steady income is maintained.

Keep in mind that there are no quick fixes in
repairing your credit. By contacting credit bureaus,
creating your own corrections, budgeting and
consolidating your debts can improve your own score.