Saturday, June 23, 2012

How to Repair Your Credit Score

Author: William Hauselberg

Repairing your credit score takes time, and although it is not an easy process, avoid the temptation of online credit repair scams, no matter how appealing they may be. Remember, there are no quick fixes, but there are things you can do right now to start the process.

Examine Your Credit Report

In order to repair your credit report, you need to know where the problems really are. You are entitled to a free annual credit report issued by the government. Pull this report and study it carefully and thoroughly examine your report for any errors, big or small. In addition to making sure all payments are correct and nothing is incorrectly listed as a late payment, you’ll also want to verify that all your personal information is correct. Things such as an incorrect address or spelling can cause more damage than you think. If you do encounter any errors, dispute them immediately with both the credit bureau and the reporting agency.

Pay Your Bills On Time

One of the largest contributing factors to your credit score is timely payments. In fact, 33% of your score is based on payment history. In order to make sure you are paying your bills on time every month, it is helpful to set up payment reminders or even enrolling in automatic payments that are deducted directly from your bank account each month. If you do choose to enroll in automatic billing, remember that it will only make the minimum payment each month, and although your bills will be on time, making only the minimum payment means it will take much longer to pay down your debt and repair your credit score.

Stop Using Your Credit Cards

As difficult as it may be to stop using your credit cards, remember, misuse of those cards is what damaged your score in the first place. You will also want to make a list of all your cards, and examine the balance and interest rate on each. Set up a payment plan to pay down the card with the highest interest rate first by paying more toward that card and the minimum on your other cards. Once you eliminate one balance, you can tackle the rest in the same manner.

As you take the necessary steps to repair your credit score, remember, it takes time, patience and discipline, but it can be done.

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