The process of correcting the wrongs in your credit reports can be tedious, lengthy and expensive, especially if it is not handled well. However, it is important to know that everything a credit repair clinic does to rectify your credit problems; you can do yourself at less of no cost. If you choose to use a credit repair company, it is important to know a federal law that prohibits credit repair companies from taking your money until they have provided all the services agreed. This means consumers have to sign a written consent or contract stating all the underlying services as well as terms of payment with the credit repair clinic.
It is also important to acknowledge that by law, you are entitled a free copy of your credit report once a year from any of the three nationwide credit reporting agencies; TransUnion, Experian and Equifax. You can submit your request for a copy on the website annualcreditreport.com. Consumers also have the right to dispute any outdated order or mistake appearing on the credit report at no cost. If a company takes any adverse action against you; for example, by denying you employment, insurance or credit as a result of information appearing on your credit report. You also have the right to receive a free copy of your credit report.
How to improve and maintain your credit scores
There are many ways of repairing a bad credit. The most critical aspects contributing to the rise or fall of credit scores include; history of payment, length of credit history, amounts owed and new and type of credit applied. Payment history is the greatest determinant of one’s credit score, since it is weighted at 35%. To rectify the problem of poor payment history; you need to pay your bills on time, stay current even when you miss your payments and payoff your collection accounts to remove them from your credit report. The length of credit history is very critical when it comes to credit scores. The best way to manage your credit history is to avoid opening too many accounts too quickly.
The balance of how much you owe your creditors or lenders can also greatly impact your credit scores. However, the process of managing and cleaning your payment history requires discipline and understanding. To overcome this challenge; pay-off your outstanding debts, keep low balances on your credit cards, have few credit cards and avoid the temptation of using a credit card to improve your credit scores in the short-term. When you are applying for a new line of credit or choosing a type of credit to use, always consider the following protection strategies. First, work to reestablish your credit history, if there are any preceding problems and request to have your credit report send directly from the credit reporting agency. If you have credit cards, make sure you mange them correctly and do not apply for a new account if you do not need it.