Credit plays an integral role in whether or not you qualify for a loan or credit card at an attractive interest rate, making healthy financial habits the key to building it and increasing it over time. Therefore, it’s vital that you establish these habits that can help improve your score in the long term.
First step to ensure your credit report is accurate is reviewing it regularly and contesting any incorrect items that arise. You can file disputes with all three major bureaus by contacting them with proof of identity as well as documentation to back up your claims.
Once your credit reports are accurate, it’s time to start building it back up. That means paying all outstanding bills on time and taking steps to reduce debt load so your credit utilization ratio doesn’t rise too high.
Negotiating with creditors to remove negative marks on your report is another integral component of credit repair, and is one of the best ways to boost your score and build it further.
Legitimate credit repair companies will offer free consultations to assess your needs and devise an action plan designed to boost your credit. They should also offer credit monitoring and identity theft protection services.
Signing up for credit counseling and getting your credit report free can also help shed light on what may be contributing to a low score; however, it’s important to remember that credit counseling shouldn’t serve as a replacement for making responsible financial decisions.
Whenever considering credit repair services, it’s essential to read over their contract carefully and ask any necessary questions prior to signing it. Also make sure that they are licensed businesses and that cancellation within three days is free.
Though there are countless credit repair companies available today, you should proceed with caution when engaging one. According to the Consumer Financial Protection Bureau (CFPB), some may seek to take advantage of consumers by offering quick fixes without being upfront about costs; as much as half of their complaints have included accusations of credit repair scams or fraud.
Be wary of credit repair companies that pressure you into paying upfront before doing anything for you, since federal law regulates credit repair organizations and requires them to abide by certain guidelines before seeking or accepting payment on behalf of their clients, such as providing any services on their behalf.
Truth be told, there are no fast fixes when it comes to improving your credit. Although you might experience some initial success quickly, real improvements typically take at least six months or longer.
