How to Repair Credit On Your Own - Insurance Finances

The following are some tips that can help individuals to repair credit on their own:

Request a 3-Bureau Credit Report

The first tip is to request a full credit report to check exactly where you stand. Everyone is entitled to one free credit report a year from the 3-major credit bureaus, which are Equifax, TransUnion and Experian. The credit report does not have the credit score, but there are companies that can help you calculate it. The credit score ranges between 300 and 840, and a credit score of 740 is considered fine. A credit score of less than 600 is not so good, and may attract higher interest rates if you ever try to get a loan. Knowing where you stand helps you create a plan to recover your financial footing.

Check for Errors

Analyze the credit report to check for any errors. If you find that there is any discrepancy, such as credit cards you do not own or major purchases you did not make, record the error and dispute it. To do this, you need to highlight the error, gather all supporting documents and send this information with a written letter to the credit bureau that reported the false information.

Create a Budget

You need to create a budget to take charge of your financial situation. Budgets can help you live within your means and not spend more than you earn. Budgets can also help you pay your debts and your bills on time. Paying bills on time can significantly improve your credit score. If you have to, setup payment reminders to remind you to clear your bills on time. It is also important for you to reduce the debt on your credit cards, but you should not cancel these cards.

Resist the Temptation

Finally, individuals should resist the temptation to take new credit cards, as these can negatively impact their credit score. Applying for too many credit cards within a short period of time can significantly impact a person’s credit rating. Even in future, after clearing your debts, only apply for new credit cards when you really need to.

Repairing a credit score can take months, or even years, depending on how bad the damage was. Never fall for scams from people who claim to repair credit scores overnight. If you are having difficulties with any of these tips, or you need a guiding hand to help you stick to your goal, you can hire the services of a professional credit repair company.

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