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Fix Your Credit Report
Jun 08, 2004
Do you have things on your credit report that are affecting your credit score and ability to get a loan? Don't give up. In this article we will give you guidlines and tips on how to fix or repair your credit report and start building good credit to increase your score.
By now, you probably know that your credit report is a very important part of your personal finances. It is your financial reputation. But what happens when you make mistakes? Everyone makes mistakes, and, unfortunately, sometimes these mistakes can result in a poor reputation. This is true of your credit.
The good news is that you can fix your credit report. By taking the time, and by exerting a little effort, it is possible for you to improve how you look in your credit history. Here are six simple suggestions for improving your credit report:
- Pay your bills on time. This is, perhaps, the most important thing you can do to fix your credit report. Whether or not you pay on time means a great deal in terms of how creditors and others see you. If you want to show that you are serious about meeting your obligations, it is vital that you start making on-time payments – and making the full minimum payment. Do this for a few months, and you will see a difference in your credit report.
- Keep your outstanding debt low. When you have available credit, some of it is taken up, of course. One of the things that is looked for in your credit history is how much of your debt you are using. For the most part, once you get to the point where you are using 75% of your available credit, things start to reflect negatively on you. Ideally, you want to keep your outstanding debt to below 50% of your available credit. It's even better is you have less debt. A good way to improve your credit report is aggressively pay down some of your debt.
- Watch your available credit. Even if you are not using it, creditors might get nervous it you have a lot of available credit. If you have a lot of accounts – some of them with high limits – you might be seen as a risk in the future. If you have a lot of available credit, consider cancelling a credit card to limit your possible exposure to debt.
- Avoid too many credit inquiries. You can improve your credit report by limiting your credit inquiries. Credit inquiries are when you initiate a credit check to get a loan, sign up for a cell phone, or for some other reason. If it looks as though you are trying to get more credit, your report can be affected. You can fix your credit report by keeping inquiries to less than two every six months.
- Keep track of your personal credit report. One of the reasons that a credit report may be negative is due to errors or even to identity fraud. These issues can lead to negative items showing up on your credit history and harming your financial reputation. If you check your credit report regularly, you can catch mistakes and have them fixed. You can also identify instances of identity fraud and have those items take care of as well.
- Show patience. It is important to realize that it takes time to improve your credit report. A credit history can't be fixed properly in a short amount of time. It can take a few months (usually three to six) in order for substantial improvements to show up. This means that you need to follow good financial habits and work at improving your credit rating.
It is possible to fix your credit report or build credit. However, it takes dedication to responsible practices, discipline to develop good credit habits and patience to give your program time to work.
Good Financial Habits >>