In the eyes of lenders, consumers amount to little more than a series of numbers. How high or low those number are affect the outcome of loans we apply for, deposit requirements from utility companies and landlords, limits on our credit cards, and even how much we're required to pay down (or pay in interest) to qualify for a mortgage. A low credit score can be crippling to your long-term financial health-if you don't take the appropriate steps to fix it.
Section #1: Identifying information. Look closely at the following:
Section #2: Credit accounts. After you check over identifying information move on to the section that lists the accounts you have opened and closed. Scan this section closely for the following:
Section #3: Credit inquiries. Inquiries reveal who has asked to review your credit report. There are two types of inquiries: soft and hard. Soft inquiries are made by lenders looking to make preapproved credit offers or your own requests to see your credit history. These do not affect your credit score. Hard inquiries are the ones from lenders that resulted from you applying for credit (unsolicited credit cards, car loans, mortagages, etc.). Look for the following:
Section #4: Collections and public records. The last section of your credit report lists any collection actions and judgments that are a matter of public record-things like bankruptcies, foreclosures, garnishments, lawsuit judgments and tax liens. Here is what to look for:
Disputing Errors Credit bureaus are required by law to investigate any mistakes your bring to their attention and report back to your within 30 days. If you received your report in the mail it should have come with a form for disputing errors, otherwise you can call or visit the credit bureaus website for further instructions. Typically they ask the creditor that reported the information to check their records for errors.
Ok, so I got a letter offering to settle an account with an original balance of over 5K for $1,300. Can I do this on all my negative marks? I don't want it to show up on my credit as settled, I want it removed.
Do I need a credit repair company or is it a DIY fix? How do I do this?Credit counseling services have a sliding scale. I would go to one of them for personalized advice.
Be sure to check the BBB on such places! You have to make sure that these companies have your best interest at had.If they are legit and want to give you a settlement that a great idea! WE ARE ALL NUMBERS ON PAPER when it comes to CREDIT!
There are non profit credit counseling services, but I personally, would avoid any service or offer and work with each company and creditor on your own.
Many of those services (even the non-profit ones) cost a lot of money and they are doing things you can do on your own if you put your mind to it.
This is what I did when my now ex-husband, ruined my credit when I was young.
I assessed my income, I figured out exactly how much I could pay each entity (and there were a lot of them). Then I called every single company and asked to speak to supervisor or manager until I got someone who would hear me and help me.
To each person, I explained what happened to me and I laid out my plan for how I was going to solve the problem. During each plea I asked if they could forgo some of the debt, if the answer was no, then I asked if they could cut me a break on the interest. While most said, no to both, some did work with me as long as I worked with them and kept to my word of paying X amount by the X of each month for X number of months.
If I had to miss a payment, I called and asked for help. I tried not to do that more than once per company, so I had to keep very good records of what I was doing when.
It took almost 5 years, but I got everything paid and got my credit back to where I wanted it.
It was not easy.
At one point I had 3 jobs (I was much younger than I am now) and I had to totally change my lifestyle...I had a strict budget and cut every single thing out of it that was not a basic.
I learned to make every penny squeak. It was not fun or easy, but it was very satisfying because I was not letting a really shi**y situation win. I was going to win and I did!
Today I don't even think about my frugal life style and when I got myself back together, I vowed to keep my life as simple as possible.
Sending prayers and blessings!
This page is about using free credit reports. There are ways to keep track of your credit score and reporting without having to pay for this service.
This page is about understanding your credit score. When you know what your credit score means, it can help you determine how best to conduct your borrowing.
I was told that I shouldn't bother paying off my debts (other than student loans), because paying it out won't change my credit score at all. It will still be lousy, so I might as well keep my money. True?
By Jenlyn from Tonawanda, NY
Paying off creditors definitely raises your credit score. It lowers your debt to income ratio which is something lenders look at. It take a month or so for payoffs to show up on your credit report. Hope that helps!
My husband and I would like to be able to make a budget using credit cards. We have little credit and would like to be able to someday get a loan to buy a home. How can we successfully budget our finances to be able to pay off the credit card every month?
To establish good credit, pay your bills on time. To keep out of debt while using credit cards, pay off the entire amount when the bill comes. It is easy to get into the habit of paying the "minimum" due, but you will soon find that you are accruing finance charges and the "minimum" due starts to grow as your balance increases. The credit card companies are out to make money--their intent is not for you to pay off the balance each month! When we were first married, we bought a washer/dryer combo on a Sears credit card. Money was tight, but we knew we could make the minimum payment each month. We paid month after month--which became year after year. By the time we had paid off the washer/dryer (we bought nothing else with that card), we had paid the original price THREE times! We certainly learned a valuable lesson!!
you can't build credit by charging something and then paying it off the next month, you need to show that you can charge and make payments, always more then the minium payment. And always on time, do not get over the limit fees or late payment fees, because that will bring up your finance charges. If you want to buy a house in the future, you can't buy it and get a loan and pay it off, you need to make payment for a very long time and the bank needs to see that you can handle a balance for a period of time, say 6 months and then pay it off and then charge something else and make payments for a period of time then pay it off. This will show good on your credit report and your credit points will go up. You also can get a small loan from a bank to make time payments to show a credit history..I'm not saying to get into credit debt, but you do need to establish credit history. I hope this information helped.
Hi Jessica,
May I suggest a different approach? I am a big fan of Dave Ramsey. You might try checking out his website at www.daveramsey.com and also finding out which radio station in your area carries his program. He is hugely motivational and anti-debt to create "credit scores". He has a lot of great suggestions and specific ideas on how to get home loans, how much you should borrow vs. your income, how much to put down for the best return (and interest rate) on your money. I have been listening to his program for about two years now and feel both our financial situation and our marriage are stronger for it!
Hello. I had a situation recently where I was offered a credit card and didn't want to take it (this debt thing isn't one of my issues, and I don't want it to be!) but it's good to have some credit cards I was told by a loan broker, so for what it's worth, this is what she said. You open the credit cards far in advance of wanting to buy, and not too many at a time. Meaning, one or two probably. If you accept a credit card, be careful, even if you never use it or cancel it before the first due date, there may be an open and closed account on your credit anyway. Always ask once you've accepted a card, nto activated...accepted. Before you decide to dump a card, make sure you've had it at least six months, and if it's right in the beginning you might want to reconsider if it's already an account, it could impact if it's on the report, depending on how long. American Express (I loved this card because I never was tempted to carry a ballance) they told me, the broker, that American Express is the example of credit that won't help you get a house down the road.And it's the same problem if you charge and pay off each month on another card. They can't see you make payments. With AMX it's even worse, because there's no spending limit, normally. So, the way around it, I was told, is to carry a small balance, even if you pay it off every so often. Maybe just a few months then pay it off. NEVER pay only the minimum, ever. Make certain if you decide to make a payment off the time it's due, that it gets applied in the month you think it will, so you don't have no payment in May for example, becuse you paid May on the first, and someone's computer thought you meant April. Make sure that when you do carry a balance, it's less than HALF of the limit. That seems to be a reapeat theme with a lot of brokers, accountants and so forth, no more than half the limit used on any one card at any one time. Hope that helps, it's been consistant advice from my end.
I hope to buy when I'm a nurse, even something small, but not having enough credit though mine is really good what there is of it, can hurt. It's different with a house, I qualified for a new car, no down payment no income information at all at a preferred rate though my bank, yet, I can't get more than $500 limit on a credit card. I told them, it's weird, you were going to give me thirty plus thousand for a car, no questions asked...but it's different. I don't have much credit card experience, except AMX.
Talk to Fannie Mae (if that's spelled correctly you can find them on the web! :) ) but find an authority to guide you so there are no unhappy shocks later. I do know, that if there isn't something in your credit that you need, it takes months sometimes to fix that. So, starting early (as I am) is a good plan.
Good luck to you! Enjoy the house, paint it any color you want! ;)
Keep in mind that your credit report may be tied to your spouse's. If your spouse has bad credit habits, it could affect your credit as well.
Pay your credit card bill on time to eliminate unwanted interest payments and nasty late fees. This can really add to your bill and possibly give them an excuse to raise your interest rate.
