Restoring Your Credit Worthiness Quickly

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Tuesday, September 30th, 2008 Subscribe To Our Feed

How Increase Credit Score

Is bad credit haunting you? If you are unable to get approval for credit card applications or personal loans, it is possible you have bad credit.

You will need to get your credit reports from the three major credit bureaus to check your credit score. They three credit bureaus are Experian, Trans Union and Equifax. A faster way is to order a 3-in-1 report that contain you credit score as well.

If your credit score below 630, your credit history is bad. Many factors can contribute to a low credit score. However, at this point, we shall focus on pushing your credit score to a more acceptable level.

The first step is to check what is inside your credit reports. Look out for negative items such as late payment, debts that were acquired by another person, accounts shown as open that were long closed and any other unusual records. Contact the credit bureaus to remove as many of them as possible. Also check other minor details such as incorrect name, age and address. Get them corrected as soon as you can.

The second step is to add positive records to your credit reports. When you review the three reports, you will likely find that they do not tally exactly. There will be positive records in one report which are missing in the other. Contact each bureaus to have them add to your reports in their database.

The third step is to review your payment history. Do you frequently miss your bill payment? You need to set yourself a budget each and every month for bill payment. These include cell-phone bills, mortgage payment, credit card balance and so forth.

If you have large credit card debt that make it difficult for you to pay even the minimum amount, you need to call your creditors and ask for a reduction in interest rate or even an short term interest freeze. Explain to them your problem and your proposed solution. They may not grant your request immediately but keep up your efforts. Druing this negotiation phase, you should try to keep your repayment steady and consistent. As long as you maintain a steady stream of repayment, they may grant your request.

Your payment history plays an critical role in the credit score calculation. So this is an important step. Pay all your bills on time.

The fourth step is to put away your existing credit cards and come with a plan to eliminate your debt. If you do not know how to do this, visit your local library and read up on books related to debt elimination.

The fifth step is to sign up for a secured credit card. This type of card work like a normal credit card but it require you to have a cash deposit or saving account with the card issuer. The amount deposited will be the credit limit. It also serve as the collateral. This will stop you from getting into more debt but still provide you the convenience of credit card purchase. More importantly, your usage of the card is reported back to the three bureaus. This means that you have a good chance to rebuild your credit history.

Restoring your credit score will take some times. It will not happen overnight. Stick with the five steps above and you should see some credit score improvement very soon.

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