How Do I Fix My Credit for Free? Yes, You Can Do It Yourself
Living with a bad credit tends to make things more stressful and at times, expensive as those with problematic credit reports are often given much higher interest rates and less favorable terms.
It is essential to check your credit report and make the necessary repairs. Now you might ask how do I fix my credit for free? Read on and learn how credit repair works.
How Does Credit Repair Work?
Before trying to fix your credit, you must first understand the basics of how credit repair works.
Be knowledgeable of your rights and limits
The most important thing is to understand your limitations when it comes to your credit. The credit reports are usually governed by federal laws and credit company regulations to ensure that consumers are protected against scams.
In effect, this will allow you to perform many things:
- You have the right to repair your credit, the same way the credit companies does.
- Its possible to remove inaccurate information from your credit history, as stated under the Fair Credit Reporting Act.
- You or anyone working for you is prohibited to remove accurate but negative information.
Know what shouldn’t be reflected in your credit report
The credit history gives a lot of information about you. Several items shouldn’t be included in it.
These legally banned details include those that don’t have a direct impact on your credit value and those that don’t reflect any of your histories.
Some of the banned items that you can remove from your credit report include:
- Medical history
- Chapter 11 bankruptcies of more than ten years (How to Remove Bankruptcy from Credit Reports)
- Debt that is more than seven years
- Marital status
- Sexual preference
- Race or ethnicity
Check your credit report
Checking is the first step to understanding and repairing your credit report. This will help you keep an eye on the latest items and catch suspicious entries.
You’d also be able to keep track of your updated credit score.
Three major bureaus can help you with your credit reports: Experian, Equifax, and TransUnion. These can be accessed freely once a year through AnnualCreditReport.com.
Take time to check the reports from each of these agencies as they may give varying data. Learn and understand what each of these reports says about your debts.
Determine if you need credit repair
After knowing and checking your credit report, it’s time to determine if you are allowed to fix or repair it. At times, you can repair your credit report for free, especially when inaccuracies and erroneous information are present.
How Do I Fix My Credit for Free?
Keep in mind that there is no easy way to fix your credit. Negative but accurate information will still be reflected in your credit for about 7-10 years.
However, there are helpful ways on how you can build better credit to help you improve your credit score.
Enhance your payment history
The payment history is an important component to improve your credit score. Avoid late or missed payments as this will reduce your scores, leading to significant damage.
The negative information will be reflected on your credit report and will have a great impact on your credit score. Size and date of debt are also factors considered.
Higher debts and more recent missed payments will lower the score, and continuous on-time payment will lead to a positive credit score.
Learn your credit utilization rate
The credit utilization rate is the comparison between the amounts you borrowed versus your available credit. This balance-to-limit ratio is basically the sum of your debts divided by the total credit available.
The higher the credit utilization rate is, the more negative impact it will have on your credit score.
Generally, the ideal rate is below 30%. To achieve this value, you can either choose from:
- Reducing your debt through payment of your account balances. Regular and on-time payment is a better option to improve your credit utilization rate and increase your credit scores.
- Increasing your total available credit by raising the credit limit of an existing account or opening a new one. Increase in credit limit is an appealing yet risky option. It can lead to more debts if improperly used.
Consider the credit accounts you own
The different scoring models will consider the amount you owe concerning the different accounts you have. The key is to settle debts in some account until the balance is down to zero.
Be sure to keep these paid-off accounts active to serve as plus points and give you good standings.
You may also try and consider debt consolidation which involves refinancing of your debts to reduce the interest.
Be aware of new credit
Opening several accounts in a short span of time may be risky and lead to negative feedback to your credit score.
Before doing so, be sure to know the effects that it may bring. Consider the scoring models that are being used and its impact on your credit scores and report.
What Are Your Other Options?
If your credits are stressing you, then it may be helpful to seek help from the experts. Numerous reputable credit repair services can assist and guide you through the process.
Credit repair services, like CreditRepair.com, are equipped with skilled credit professionals who are specially trained in various fields involving credit repair.
Allow them to help you build and develop a plan that will fit you and your needs.
Bad credits may lead to problems if not properly handled. Credit repair should be done to ensure that all inaccurate and unverifiable information in your credit history will be disputed.
Repairing your credit can be a daunting and costly task. How do I fix my credit for free? Make sure you are updated with your credit reports and do the necessary disputes for faulty records.
Or, you can get assistance from the credit repair services which will cost you a little, it’ll easier and faster process.