7 Critical Facts About Repairing a Bad Credit Report

Please be aware that this is a sponsored post from Alpha Finance that contains affiliate links, complying with FTC regulations.

 

Having a bad credit report can possibly tear you and your reputation apart, especially with lending companies. You certainly do not want this to happen to you, as your credit report determines how good of a payer you are. Doing business with people who has a bad credit report is typically not the perfect scenario for companies. It’s basically the same with lending a friend some money – would you do it if you know that your friend has a history of skipping payments?

 

However though, if you are already deep in debt and your report is kind of on the rocks, then do not fret, as it is not too late for you. You can turn things around and repair your credit report, you just have to know how to do it. If you are worried about stuff such as bad credit car finance, then go ahead and read on. We promise you that by the time that you are done with this article, you will be one step forward to having your credit score repaired.

 

It is Totally Doable

And yes, you can do it yourself. You have the freedom to get professional help from a credit repair company, but know that there is nothing a credit repair company can do that you cannot. You can always research – the internet has a vast amount of information when it comes to credit repair. Negative information can be removed or repaired through credit report disputes, goodwill letters, pay for delete, or debt validation. These techniques are often used by credit repair companies, so you can save yourself some money by researching and teaching yourself on how to do these things yourself.

 

You are Repairing Your Credit Report and Not Your Credit Score

Repairing your credit means improving your credit report and not your credit score directly. Your credit report is the main basis for your credit score, which determines if you have bad or good credit. Get a copy of your report and check for any errors, and have it repaired ASAP if you see any.

 

Having Negative Information Removed Can be Difficult

Credit bureaus are obliged to remove reported wrong information from your credit report. This means that whether it is negative or positive, as long as it is reported and inaccurate, they will remove it. Removing negative information that is actually accurate is not possible though, as the credit bureaus must submit every consumer’s credit report, may it be positive or negative.

 

Closing Your Accounts Doesn’t Really Do Anything

Many people believe that only active accounts are being shown on a person’s credit report. Unfortunately, this is not the case. Every bank account that you open is included on your report, and closing it can actually hurt your score rather than boost it. Leaving it open and active is your best bet, especially if the standing is good, or can be improved by paying off dues. You have to know that having open and active accounts with good standing can and will improve your credit report.

 

Results Won’t Be Seen Overnight

As with anything else, results would not be evident overnight. It would definitely take some time to repair your credit history, unless something negative gets deleted on your report. Give it a few months, and you will see results eventually. Be patient, give yourself a break, and check back after some time.

 

Changing Your Habits is the Key

Sure, you may have boosted your credit report, but if you do not change your old ways, then all that is for nothing. You may experience a fluctuation every now and then, but that’s normal. What should alarm you is when your credit score drops constantly, which means that you are doing something wrong. Bad spending habits is usually the culprit, as well as with refusing to pay your bills on time. Borrow the amount that you know you can pay back, and pay them on time.

 

Try Doing Nothing

Yes, you read that right. Ignoring your credit report and letting things pass is one way to deal with it. As we have said earlier, your credit report is not always constant, and it has a tendency to fluctuate. Negative information won’t be there forever, so relax and sit back. Save yourself from the stress and just act on it once you see an alarming thing such as errors and sudden drops.

I received compensation in exchange for this article.

Now that you know the important stuff, it’s time to decide if you will act on it and just wait for your report to handle itself. Good luck, and always remember to spend your money wisely!

Mustard Seed Money

Welcome to the website. A mustard seed is a very small seed but astonishingly grows very large over time. My hope is that through your financial journey that your small investment in time, money and faith will grow beyond anything that you could ever imagine.

20 Comments

  1. I love that you touched on the fact that if we don’t change our habits nothing is going to change! And would you ever want to lend money to a friend who you know misses payments.

    This should also be a good judge for us personally making sure we are doing the best we can do that even our friends who know all our money secrets would still feel comfortable lending us money.

  2. Building good credit history is the same as having good money habits. I always pay my bills in full and on time each and every month. After ten plus years, it became a habit. Now, I don’t have to do anything extra to maintain my excellent credit report and history.

    Having an excellent credit history can do wonders for your finance. I get the best borrowing rates, the credit card with the best perks and financial institutions work harder to earn my business.

    Being responsible with your money does have its benefits.
    Leo T. Ly @ isaved5k.com recently posted…Do You Want To Be Your Own Boss?My Profile

    • It always makes me laugh that the people that don’t need credit get the best rates. Especially since they don’t need to use it. Like you said, being responsible with money has it’s benefits.

  3. Thanks for sharing the great tips! My credit score was once pretty bad because I forgot to pay off the balance. It was a $350 mistake.

    After four years of being scarred by that experience, I started using my credit card again. This time I was more careful about the monthly payment and saw my credit score increase after six months or so. 🙂
    Ms. Frugal Asian Finance recently posted…Aug 2017 Food Expense Report – $844.26My Profile

    • Thanks for sharing Ms. FAF!!! It can definitely hurt if you don’t pay your bill on time. A small mistake can stay on your credit report for seven years, which seems like a long time.

  4. I feel fortunate that Mrs. Freaky Frugal and I have always had good credit.

    I do have a question though. When you say…

    “Every bank account that you open is included on your report, and closing it can actually hurt your score rather than boost it.”

    Does this include regular checking and savings accounts as opposed to bank credit cards and loans? I’ve never actually looked at our credit report – I’ve only watched our credit score. I guess it would be smart to look at an actual report.
    Mr. Freaky Frugal recently posted…Books for free!My Profile

    • Part of your credit history is based on the length of your credit account histories. So checking and savings accounts will not count since their not based on credit.

  5. When I turned 18 (back in the day 06′) I was offered my first credit card by a BOA teller. I accepted it had a $300 limit than a $500 than $700. I had no idea what credit score meant, let alone how to obtain and keep good credit. So, I shopped and paid interest. Lost my PT job while in undergrad 🙁
    Things went from “oooohhhh somewhat free money” to “collection agency for $238” FAST.

    I woke up after that! Things are much better now.
    Belle recently posted…9 Smartphone Side Hustles – Make $500/Month With These Simple Smartphone AppsMy Profile

  6. MSM –

    Definitely is doable, as I have helped my brother and mom in boosting their report standing i.e. sticking to a few credit lines, paying off amounts in full for “forever” going forward, increasing their credit limit on their main credit account to increase the amount unused/reduce % of credit used, etc.. It takes a LONG time, but is worth it and doable.

    -Lanny
    Dividend Diplomats recently posted…Expected Dividend Increases in September 2017My Profile

    • Thanks for sharing Lanny!!! It sounds like you are really helping your family out which is awesome. It’s definitely not easy but definitely worth it in the end 🙂

  7. Important theme here. In my experience it comes down to three things:

    1. Open a bunch of credit lines
    2. Pay them all without incurring interest
    3. Keep accounts open to show low utilization but high available credit

    I open a new card roughly once a month, and combined with mortgage pay down, my score is approaching 850s.

    Thanks for sharing!

  8. I mainly try to focus on developing good money habits rather than trying to look at my credit score or report. Like you said some of the info is wrong most of the time anyway so why worry about it. Maybe the only time you should take a look at your report is when your trying to get pre-approved for a home or trying to get any other type of loan.
    I believe as long as your money habits are good, pay bills in time, and pay credit card in full everything else will take care of itself.

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