Repair Your Credit

People with bad credit most probably have left no stone unturned in the internet, so to speak, just to find a solution. But oftentimes, the “tips” they find can only make things worse. Here are some of the bad advice you should avoid if you want to repair your credit:

1. Close Your Problematic Accounts

Closing a credit account, no matter how good or bad it is, is never a good idea. It can never help your credit score. As a matter of fact, it can only make things worse and damage your credit instead, especially with the new changes incorporated in the FICO Scoring System (Fair Isaac Corporation Scoring System), the score that determines a credit user’s likelihood to pay their bills on time and in the right amount.

The exact scoring formula of FICO is kept closely guarded. However, what’s clear is that you can achieve an improved FICO credit score by doing things such as paying off loans on time, settling your debts instead of filing for bankruptcy, and just being more responsible with your expenses. Increasing your FICO score can lower your interest rates, and making it even easier for you to pay off your debts.

So instead of closing your accounts, you must strive to clear them up. Aim to have late payments, collections, charge-offs, bankruptcies, foreclosures, repossessions, judgments, and tax liens removed from on your credit report.

2. Send Threatening Dispute Letters

Some people and companies in the credit industry encourage using dispute letters that seem as if written by an attorney. They contain long and legal-seeming arguments reminding the credit reporting company of penalties they may face if they don’t obey every single word on the letter. This is not how one should approach things. It could backfire, especially if the credit company finds a loophole in the dispute argument. Leave the legal language to the lawyers.

Initial dispute letters should be short and simple, normally just telling what you are disputing, why, and an enclosed proof supporting your position. That’s it and nothing else.

3. Dispute All Negatives on Your Credit Report

Dispute things such as obvious mistakes, outdated information, and others. But when putting these in a dispute letter, place only 4 or 5 disputes at a time. Remember that credit reporting agencies must investigate each dispute within 30 days. So if you fill a letter with 20, 30 or even 40 disputes, there’s a very big chance they will only trash your letter.

Keep these tips in mind, and with a little more caution and prudent cash management, you can successfully repair and maintain your credit in good standing.

Identity theft is as rampant as can be nowadays, especially with the fact that technology can be abused by those who know how. Thankfully, technology can also be used by identity fraud victims to regain their identities. A few simple steps can lead to you proving that you are not liable for all the false purchases credited to your name.

First, you have to collect data that will back you up in case (and most likely) the perpetrator will deny your charges. Some records you should keep include: 1) conversations with your creditors, the authorities, and other notable people that may be of help to your case, 2) correspondence via certified or registered mail, 3) copies of letters and documents, and 4) in case of a lawsuit, take note of the lengths of time spent plus the money you spent to clear your identity.

Then, you should contact the proper authorities. Notify credit bureaus such as Equifax, Experien and TransUnion. Also report the crime as soon as you can to the police and sheriff’s departments who have jurisdiction in your case. Certain lenders and banks require a police report to convince them of your innocence and may cost you even more money when they hold you responsible for charges made in your name.

Next, pull your credit report immediately in case someone tries to make a purchase or get a loan or even create a new account under your name. Then put a fraud alert on your credit report to prevent further damage. In case it has been damaged already, make sure to point out that you have already put a fraud alert so as to strengthen your case.

If anything from you was stolen, file a report as soon as possible. Whether it was a stolen credit card, checks, or ATM cards, tell your bank. If your Social Security Number was misused, report it to the Social Security Administration. It’s the same with charges on your cellular phone ( if it were stolen) or on your phone bill that you know nothing of. The sooner you file your reports, the sooner the accounts will be checked for fraudulent purchases, and the sooner your accounts will be suspended to prevent future purchases placed under your name.

If your driver’s license number has been misused, or if your passport is lost, report them as soon as possible as well. These crimes can lead to even bigger crimes that you know nothing of and may lead to even more serious problems if not given the proper action.

Many online services are willing to help you restore your identity and fix any monetary problems related to your case of identity theft. Free copies of credit reports are the most popular, and can be a vital first step in further protecting your identity in the future.

And finally, after fixing all your identity theft problems, be more wary of your actions. Remember the saying that “an ounce of prevention is worth a pound of cure.”

You may have noticed those ever-present “Free Credit Report!” ads online. They may have piqued your interest—but now you ask, what would you get from a free credit report? Do you know what it is for? This article will tell you in no time at all.

A Credit Report (or credit history, credit score) is basically a record of one’s past borrowing and repaying history. This shows how reliable someone is when borrowing and repaying money from banks and lenders. It also includes information about late payments and even bankruptcy.

Now why should you get your Credit Report? Here are the reasons why:

1. Getting a Credit Report is fast and free. Most loan websites, no matter what kind, offer a free Credit Report as a service. This is to help visitors determine if they’re qualified for the loans that the lender offers (mortgage, car loan, credit card, school loan, etc.).

2. A Credit Report will help you manage your future credits. You will know when to control your impulse buys, plan ahead for big purchases, and manage your credit in general.

3. Finding out your credit score in a Credit Report can get you lower interest rates depending on how low or high your credit score is. The higher your credit score, the better. Those with lower credit scores are most likely required to pay bigger downpayments or higher interest rates, as opposed to those with higher credit scores who receive the best interest rates and sometimes even waived downpayments.

4. A Credit Report can help protect you against identity theft and credit fraud. Since a Credit Report shows all your purchases via credit, when you see unfamiliar purchases you can report it to proper authorities as identity theft—they will be the ones to track down the person/s using your credit card and identity.

5. A Credit Report can even land you a job! If you have a good credit score, employers can see that you are financially stable and responsible. It predicts how likely you are to pay your bills and other payments on time.

6. Checking your Credit Report can help you fix errors in it more easily. Credit repair is especially useful when you have quite a common name and usually end up with mixed or interchanged reports. Your identity and reputation can be saved, and it can spare you from criminal conviction if by chance the person you got switched with is in financial trouble.