How to Improve your Credit

Here are six basic things that an individual can do to help improve their credit.

Fix your Credit reports to make them 100% accurate

Current statistics tell us that 7 out of 10 credit reports contain errors, so this step is critical. You can either dispute the questionable items on your credit reports yourself, or you can have a reputable firm, such as Lexington Law, do it for you. Do not expect credit bureaus to help you voluntarily. Credit bureaus are for-profit companies, and it costs money to update records. You must be proactive.

Regulate your open accounts

Consider closing unused accounts, high interest accounts, annual fee accounts, etc. Try to have about 6 credit accounts open, all in healthy standing, with a lengthy history if possible.

Don't recklessly apply for new credit

Multiple inquiries over a short period of time may make it seem like you're opening numerous credit accounts because something is going wrong financially, or that you have more debt than you can realistically overcome.

Pay on Time

Pay all your bills on time each month. Negative items, such as late payments, collections, and bankruptcies have the greatest negative effect on your credit score. Lenders need to know that they can count on receiving timely payments from you.

Don't overextend your credit limits

If your credit cards are pushing their limits, then this can be a red flag for lenders. Try to keep your credit card account balances below 35% of your available credit limit. This may keep you from looking overextended.

Time fixes everything

This may not always be true with credit, but it does apply. When you establish a long history of using credit responsibly you demonstrate a certain quality of character. You might want to keep the oldest account on your credit report open in order to show an extended period of credit use.

Repairing Credit Yourself

The Fair Credit Reporting Act gives you the right to dispute any and all items on your credit reports that you feel classify as inaccurate, unverifiable, or misleading. If the bureaus can not verify that the information on your reports is indeed correct, then those items must be deleted.

Disputing items on your credit report is easy. Getting results from the credit bureaus is amazingly difficult, complex, and infuriating. It is not a coincidence that the Federal Trade Commission receives more complaints against credit bureaus than any other type of business. Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. Short of sparking a mass number of lawsuits, the credit bureaus seem to do everything in their power to discourage consumers from making progress in their restoration efforts.

Restoring your own credit is like repairing your own transmission or representing yourself a court of law; it is possible, but you must decide if you are willing to take the time and assume the risks of doing it yourself. Most people choose to allow an attorney to represent them because an attorney better understands the complexities of the legal system. If you decide your time is better spent and you would like a respectable company to help, we HIGHLY recommend using Lexington Law.

Can credit repair companies be trusted?

Many "credit repair" companies claim to remove negative credit with the flick of a wrist. Their advertisements make bold assertions and money-back guarantees: "Bankruptcy, tax liens, judgments... no problem!! One hundred percent guaranteed!! Credit report 100% cleared in 30 days!!" Can they really make such sweeping guarantees?

While some credit repair companies are outright frauds, others are not fraudulent and they use the dispute process to obtain impressive results. In fact, they delete thousands of negative credit listings every day. There is a company called, Lexington Law who has been doing it for 15 years. Learn More Unfortunately, it is risky to trust anyone to help you restore your credit. It is estimated that fraudulent credit repair companies have bilked Americans out of more than fifty million dollars. The majority of credit repair companies were started by entrepreneurs with a penchant for marketing. Consumers have flocked to these "credit doctors" only to discover that their advertisements proved far more impressive than their results. Hiring a credit repair company is like playing Russian roulette. Many of them are effective and legitimate, but it is difficult to tell a rip-off from the real article.

So, can credit repair companies guarantee results?

Not a chance! No credit repair company is so good that it can guarantee a specific outcome. It would be like a defense lawyer guaranteeing that the jury will find his client innocent. Guarantees are a sure sign of credit repair fraud. A warranty, where the credit repair company promises a refund if certain results don't occur, is a better, more realistic claim. Not surprisingly, the credit bureaus have declared war against the credit repair companies and those selling instruction on how to do-it-yourself. The bureaus lambaste credit repair companies in the media and send anti-credit repair literature to anyone whom they suspect of using credit repair services. The bureaus unflinchingly deny that accurate information can be removed from a credit report.

The simple truth is that you do not have to endure bad credit for seven to ten years as long as you feel comfortable challenging the accuracy or verifiability of your credit listings. If so, it is possible to restore creditworthiness within a much shorter time.

However you decide to address your credit challenges, realize that regardless of what you may hear in the news media, thousands before you have sought help and restored their credit. They can show you their homes, cars, and credit cards. Despite the newspaper articles, TV reports, and other credit bureau propaganda to the contrary, the simple truth remains: you can restore your credit. Learn more.