Improving Credit History
Improving your credit history is basically about doing the opposite to that which caused you to get a bad credit history in the first place.
You got a bad credit history by not making good the debt that you owed to other people either on late payments or failure to make the payments at all.
This bad credit history remains in your name for 7 1/2 years and any time you go to borrow money, rent accommodation or virtually anything else that involves the need to check your credit standing you are going to be at a disadvantage.
So what can you do to make up for your past errors?
Simply by doing the opposite to what you did in the past and borrowing small amounts of money but ensuring that you pay them back on time all the time to start to build up a good credit history will begin to compensate for your past efforts.
When many people get on top of their debt problems they are very reluctant to go back to borrowing again however in order to get your own house and a mortgage that will be necessary in order to buy it, you need to start rebuilding your credit history and unfortunately the only way that that can be done is by borrowing and proving that you have changed and can meet your responsibilities to the financiers.
You don't have to borrow a lot of money and in fact it is better to do smaller amounts at various different places so you get good credit reports from a wider range of people.
Credit cards are the easiest way to get started rebuilding your past and then buying the occasional item provided it is a necessity and at low cost on hire purchase where you make monthly payments over a set period of time and don't miss any payments as the next step towards your goal of getting lending institutions the confidence to work with you further.
Often times those with bad credit can not get a credit card, in that case they need a secured card.
you can improve your credit score by not using all of your available credit. also by make payments as agreed
Your credit may be damged to the point where you are unable to get an unsecured credit card. Your best bet at this point is to go to the institution you bank with and ask for a secured credit card. A few months of maintaing your secured credit card correctly and you will be able to apply and subsequently get approved for an unsecured card.
Go to www.myfreecreditreport.com get a copy of your credit report then review it for any items that are not correct. You do not have to use one of the "credit repair agencies" to do this for you.
If an item on your credit report is not correct then all you have to do is write a letter to each reported credit reporting agency and tell them it is not correct and should be removed. The credit reporting agency will then attempt to contact the company that reported the adverse item and ask for them to verify the reported adverse item. If the company does not respond within a set number of days then the adverse information is automatically removed from the credit reporting agency. Either way the credit reporting agency will respond to you with the action taken within about 60 days.
If you have collections or even charged off credit cards or loans, contact them and they will typically settle for about 50% of the amount due, make sure that they agree to report "paid in Full". Many of the medical bills from doctors if paid or settled for less than the amount owed will remove the reported collection from your credit report all you have to do is ask. All they can say is no, so why not ask.
You can also do this on-line if you wish just go to www.(insert credit reporting agency).com
Calling the credit reporting agency does no good, first you will be on hold for a very long time and get a machine telling you to either write to them or go on-line to dispute a credit trade line or collection.
Contact information for the 3 credit reporting agnecies are as follows:
PO Box 4000
Chester, Pa 19016
PO Box 740241
Atlanta, Ga 30374
PO Box 2002
Allen, Tx 75013
Get a copy of your credit report to review and check for any errors. If you have something that is reporting in error be prepared to dispute the account or accounts.
Keeping your revolving balances at a level of 70% or less of your credit limit is a good idea. Maintaining your balances below 30% of your credit limit is even better for scoring purposes.
» DISCLAIMER: The information contained in this article on 'Improving Credit History' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.