How to Repair Your Credit

Many customers live under the presumption that bad credit result only when they fail to pay the debt. But in reality, bad credit can result from other reasons which are stated as follows:

1 Inquiries. Your credit values are not included in your report as and when it is changed. It would take
a month or two to get all your credit details in your report. In the meantime, if you try to use those
credit for buying or mortgaging, the lender or the mortgage broker will doubt your good credit
history and will hesitate to lend you any money.

2 Missed payments. By making miss payments/ late payments, you are breaching the promise you
made to your credit card company that you’ll make the payments on time. Thereby you lose the
trust and goodwill of your company who take it as your incompetence. Late payments create a bad
impact on your credit score.

3 The worst thing that could happen to your credit is Identity Theft. The thieves who are disguised
under your name reap maximum benefits out of your credit card balance and can even rent an
apartment. The dues amounts can go sky high pushing your credit rating downhill.

Apart from these reasons, the most common reason is the inability to pay the debts. Improving your credit history is not a one step process.

One or more of these following points should help you to know how to repair your credit:

1 As a first step, order all your credit reports. Lenders do not share all of their reports with you. The
reports are directly sent to the credit bureaus. In order to get a complete idea about your credit
information, place an order.

2 Go through your report thoroughly. If the report consists of any discrepancy, give the details of the
dispute in the dispute form. The details should be meticulous, stating the reason for each and every
dispute. If there are any documents supporting your claim, attach them.

3 Do not have too many credit cards on you. Request your creditors in writing to close your
accounts. Also, do not close those accounts which a good credit history as it creates a negative
effect on your score.

4 If you end up with bankruptcy, then it might take nearly 10 years for you to get the bad credit out
of your report. It is always better to avoid insolvency.

5 Do not let your credit account to hibernate during the periods of bankruptcy. Re-establish the
accounts as early as possible. Craig Watts, consumer affairs manager of the Fair Isaac Corporation
says, “The faster you begin to re-establish good credit, where you pay on time, every time, the
faster you’ll improve your credit score.”

Lastly, show your creditors that you have resources to pay back your debts by going for work or opening a bank account