Having bad credit doesn’t need to be a permanent ordeal. In this article, let us talk about good points that can help you improve an imperfect credit history.
On Credit Report Errors
Sometimes, errors in your file may cause more damage to your credit rating. Such errors could be a result of inaccurate reporting from creditors or negligence on the part of the bureau. Furthermore, unauthorized charges can also pull down a credit score. Is there a way to resolve the problem?
The FCRA (Fair Credit Reporting Act) states that all consumers have the right to dispute errors found in their credit report. This is done by sending a letter to the bureau that issued the report. Upon receiving the consumer’s letter, the bureau must begin an investigation (up to 30 days) on the matter.
If the complaint is found valid, the bureau must send the consumer an updated copy of his/her credit report for free. The credit bureau must also contact the two other credit reporting agencies informing about the corrections made. This is why it is important to order a copy of your personal credit report once every six months to ensure that it only contains accurate information.
On Debts Assigned to A Debt Collection Agency
If you have debts left unpaid for a long time, then these debts will be passed on to a debt collection agency. Obviously, the status of your debts will reflect in your credit report. Even after paying off these charges, they may still appear in your credit report and hurt your score. What can you do? Instead of waiting for seven years, you can request your original creditor to prompt the credit bureaus to delete those records from your report.
On Managing Credit Card Accounts
You can build up your credit score by maintaining at least two active credit card accounts. Use your credit cards on important purchases but make sure that you will be able to post your payment on time. Keep your monthly charges minimal so you can pay in full and avoid carrying a balance. This way, you won’t have to pay additional interest rate costs, late fees, or overdraft charges.
On Managing Loan Payments
Having an active loan under your name is another way to rebuild poor credit history. The key is to be prompt in submitting your monthly loan payments. If your credit report shows that you can manage your loan payments without problem, then it will surely significantly boost your credit standing. In addition, prospective creditors will be more likely to trust your capability as a borrower and approve your application.
