It is possible to fix bad credit score reports that you may have in your name. The key to repairing it is to know exactly what it is that you need to repair.
Lenders view you through something called a credit score. Your credit score is calculated from your credit history. They arrive at a number from a combination of items on your credit report. A high number shows creditors that you have no financial issues and manage your finances well. A low number shows financial trouble and will result with you having a hard time with lenders. For those with problems, the best thing to do is learn how to fix bad credit score reports. In order to repair it, it helps to have a better understanding of what is on your report.
Current loans
If you are on top of your finances you will already know what loans and credit cards you owe money too and how much your monthly payments are. For those that need to fix bad credit score reports in this category, the best thing to do is stay on top of your payments. This part of your report will show a detailed list on both past and present credit cards and loans. Even if you have had a card in the past and have paid it off and closed it, it will still show up on your report. However, it will show as a closed card or loan with a zero dollar balance owing. Creditors will also be able to see how timely you made your payments each month. They can see which months your payments were late, and which months they were made on time.
Credit Card Limits
Unbeknownst to many, the amount of money you are free to borrow can bring down your credit score. You can own a credit card or a line of credit but have a zero dollar balance on it. However, if you have a high limit that is open to you, lenders may view this negatively. To them it means that you have a chance of maxing out your lending options and then not being physically able to pay it all back. To fix bad credit score reports in this category, it is best to keep your credit card limits as low as possible. Keep one card for emergencies but lower the rest to a manageable limit if you were to use them. Also, close any extra credit cards that you do not need to use. Pay close attention to credit cards that have a high interest rate.
History of Collections
If you have any history of collection companies being used to settle a debt you will have a low credit score. Any history showing that you had an unpaid bill for so long that another company was needed to intervene is not something that lenders want to see. It is difficult to fix bad credit score ratings due to this. Once this has happened it is tricky to remove as it must stay on your report for years. The best thing to do in these instances is to show that from that time and forward your payments were timely and your finances were well managed. Keep on top of your loan and credit card payments. Show on your report to lenders that it was an isolated incident and that you have been accountable ever since.
No Credit History
No credit history can actually be worse than bad history. With a bad history, lenders can at least try to work with you by determining a pattern or trend. With no history at all, lenders have nothing to work with in determining if you are eligible for credit or not. To fix bad credit score results due to not having a personal credit history, take out a low limit credit card or a very small line of credit. Use it for minimal purchases and be sure to pay it back before it becomes due. By paying it back early you are avoiding paying unnecessary interest that could accrue. For these types of transactions, use a credit card that gives you a grace paying period before the interest is calculated. Take extreme caution not to make unnecessary or large purchases and pay the balance off in full each month.
It is possible to fix bad credit score. We specialize in these matters. If you have questions or are unsure of how to start, a knowledgeable staff member at Leaf Credit Solutions can help put you back on the path to success.