How to Rebuild Credit to Fix Credit Rating?
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In most cases, your credit did not become bad overnight. It probably took several years of credit card debt that was not repaid, too much total debt or maybe you went through a foreclosure. It will take you time to rebuild your credit but with determination you can rebuild credit and have a clean credit report.
You can actually save thousands of dollars by having a good credit score. Lending institutions will typically give borrowers who have a good credit score the best interest rates. In today's economy you will probably have a hard time obtaining any type of credit if you have a credit score below 700 points. Now is the time to deal with any problems on your credit reports and rebuild credit.
The first step you need to take to rebuild credit is to request a credit report for each of the three major credit reporting agencies, Experian, Equifax and TransUnion. Consumers are entitled to obtain a free credit report once during a calendar year. Once you have your report, carefully check for any errors or incorrect information.
If there is anything on your credit report that you believe is an error, contact the report agency and file a dispute. You will want to provide a detailed explanation of the incorrect information and provide any documentation that backs up your claim such as a cancelled check showing full or partial payments.
The next step in how to rebuild your credit is to pay down your credit card debt and decrease your balance to under thirty percent of your available credit limit. Your credit score will instantly improve. You can also ask your for an increase in your credit limits on existing accounts, just don't spend the new limit and make sure your credit card company is not going to run a credit report. This will show that you have additional available credit.
Another step in how to rebuild credit is to pay your bills on time by the due date. A late or missed payment can drop a good credit score by as much as 80 points or more. Paying your bills on time can raise your credit score and is a step in the right direction on how to rebuild credit.
Credit Tips By Jay Hans