Credit Repair - Change Yourself, Improve Your Credit

If you are considering applying for a mortgage, the single most important element is credit, and if your credit report is unhealthy, you may have to repair your credit, yourself. Most lenders scrutinize your credit report, which details a list of companies where you may have applied for or received credit from, your payment history and even your credit limits. Additionally, a credit report may list information such as judgements or bankruptcies, tax liens, outstanding balances, payments due and so on. A lender will evaluate your credit responsibility by assessing all these factors.  Below, are a few steps you can take to repair your bad credit, yourself:

Step 1: Review your Credit Report for Accuracy

The first thing you have to do is get a copy of your credit report and study it. Although the credit report can be found at a number of places, it is most advisable to get a copy from its source at TransUnion, Equifax and Experian. The FACTA or Fair and Accurate Credit Transactions Act of 2003 provides its customers a free credit report annually, irrespective of whether or not they have applied for credit, or what its state is (approved or declined).

It is common to find errors on credit reports and that is what you want to look over.  Make necessary changes. If you find a few errors, you can challenge it with the credit repositories. They are entitled by law to either verify the entry within thirty days, or remove it. If you find a mistake, you should report it to TransUnion, Equifax and Experian.  FACTA laws, of 2003, further specify that if an error is found, and corrected in one of the repositories, it should automatically updated by the other two. It's important to report the error to all three agencies because one agency may be able to fix your erroneous information, while the others can lag.

Step 2: Keep your Debt Low

Legitimate credit repair entails keeping your debts low, which is also the fundamental key of any credit repair strategy. Buy only what you can afford, and do not go over your credit limit. Keeping well within at least 30% of your credit limit is the safest option.

Step 3: Establish Trade Lines

Establish at least three trade lines for two years, or more, and make all the required payments on time. Additionally, keep your account balances low on the said accounts, having at least 70% of the credit line open to you at all times.

If you feel credit repair self help is beyond your scope of expertise, hire a professional for help.  You can consider looking into credit repair counseling. A credit counselor will recommend a budget for you to maintain after evaluating your current and past credit history. But, before you opt for hiring a credit counselor, make yourself familiar with all the technicalities involved, and how it could affect your credit report.

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