Money Roots

If you are currently repairing your credit report you understand how important your score is. How this number directly impacts your quality of life.

You will be judged by employers and lenders on this number. It can prevent you from being approved for credit and worse yet being hired for a job.

When you apply for credit most lenders will look at nothing more than this three digit number. They will not take into account any reason as to why a derogatory listing is there.

There are two aspects you should focus your efforts on when repairing your credit score.

1. Deleting negative marks on your credit report.

Negative marks will cause the most damage to your credit score. However these marks can be removed before waiting 7 years.

The Fair Credit Reporting Act allows you to dispute any negative listing on your credit report. When you file a dispute you are telling the bureaus that this mark is inaccurate or invalid.

In order to file a dispute a dispute letter must be mailed to the credit bureaus. In this letter you need to include an explanation as to why the mark is incorrect. Frequently reasons are; not my account, account paid before sent to collections, item out of date. When the bureaus receive your letter they will investigate the mark.

If the mark is not verified by the lender the bureaus must remove it from your credit report. It has been discovered that many marks are removed once they are investigated, regardless of their accuracy.

2. Build positive credit

This is a more difficult task with a low credit score. This is because it is difficult to be approved for new lines of credit.

However it is necessary to open a new line of credit. The best is an unsecured credit card even with the insanely high interest rate.

With this card you should try to keep the balance at around 10% of the credit limit. This will help your score because it shows you have available credit that is not being used; the bureaus call this your ratio of credit to debt.

By making your monthly payments on time it will also create a positive payment history on your report. If you can not create a positive payment history it will be almost impossible to add points to your credit score.

In sum, you can repair your credit without waiting the full seven years. However it may be in your interest to remove some derogatory items before you apply for a new line of credit. Understand that both these parts are vital to getting you to a 700 credit score.

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This entry was posted on Monday, November 10th, 2008 at 4:21 am and is filed under Personal-Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.