credit fixing sometimes called credit repair or credit restoration, involves addressing and correcting inaccuracies on your credit reports. Credit reports, maintained by credit bureaus like Equifax, Experian and TransUnion, record your financial history including how you borrow money and pay debts. Errors on your credit report can be quite common and can significantly hurt your score. Fortunately, the law allows you to dispute inaccurate information on your credit report, which should help raise your score.
A bad credit score can make it harder to get loans, mortgages or credit cards. And if you do qualify for credit, you may be forced to pay higher interest rates than those with good scores. Having great credit can also help you save thousands of dollars in interest charges when it comes to buying a home, car or an apartment.
Bad credit can also affect your life in other ways. For example, insurers, landlords and employers might decline to insure, rent to or hire you if you have bad credit. In addition, your poor credit can have an impact on how much you pay for things like utilities, auto insurance and even a cellphone plan.
While a credit repair company can help you clean up your report, it’s important to know that you can do most of the work yourself. You can order copies of your credit reports, which you’re entitled to one free per year, and review them for errors. Look for erroneous information like incorrect account statuses, unpaid late payments that you paid on time or accounts that don’t belong to you.
Once you identify inaccuracies on your credit report, you can send a letter to the credit bureau asking them to remove or correct the error. The law requires them to investigate your claim and respond within 30 days.
However, there are a few other things you can do to help your credit improve on your own. For example, you can try to lower your credit utilization by paying down balances and not letting them exceed their limits. You can also check your credit report regularly to monitor for any changes that might indicate identity theft.
Ultimately, fixing your credit will take time. It’s important to keep in mind that negative items, like late payments and bankruptcies, stay on your report for seven to 10 years. And that’s why it’s so important to make your credit the best it can be before applying for a new loan or card.
If you have a history of bankruptcy, foreclosure, eviction or a recent divorce, it could take longer to fix your credit. If you’re trying to buy a home, it can be especially challenging to get approved for mortgages and other types of loans with bad credit.
The best way to fix your credit is to start building it early, and that means making responsible spending decisions and avoiding overspending. In addition, it’s a good idea to pay your bills on time and avoid racking up late fees. It’s a long game, but with consistent positive action and a well-maintained credit report, you can achieve your goals.