It is very unfortunate when you can’t get approval to get a traditional loan or credit card. Some of the options available in this situation include a secured credit card or credit-builder loan. The secured credit card requires putting some money equal to the credit line as collateral. Securing the line increases the chances of the bank approving the credit line. Afterward, use the credit card and the payment history reported to credit bureaus. A positive credit history improves the credit score.
A credit builder loan also improves credit score but opening one requires some money. On application and approval by the bank, funds are immediately deposited into your savings account that acts as collateral for the loan. The loan monthly payments are paid out from this savings account through the automatic draft to guarantee timely payment. This encourages perfect payment history to credit bureaus leading to an improvement in credit score.
Contact a credit repair company
Enlisting the services of a professional credit repair agency is a smart idea. The right company has a clearly laid out plan on how to repair your credit in the shortest time possible. Professional credit repair is extremely important when dealing with poor credit resulting from multiple negative credit entries. Each negative entry might need challenging through a complicated and time-consuming procedure. Attempting to fix the issues yourself might become perplexing along the way.
Credit repair agencies have experienced and competent professionals with the expertise to handle credit-related issues. These understand the best way to dispute negative entries and how to negotiate with creditors including uncooperative ones. Using a third party to handle potentially confrontational situations saves you embarrassment and time. The ideal agency is affordable and gives you an idea of how long does it take to repair credit for satisfactory results.
Use credit repair software
This is another option to repair credit although not recommended. You have to part with a fee for software to track negative credit information. This software might also create simple credit dispute letters. Using credit repair software requires paying for the product to give you forms that you have to fill in your details. This makes you do most of the work.
Additionally, some of the services offered by the credit repair software might be readily available for free on the web. This option is not recommended for costing a lot of time and doing nothing much to fix your problem.
Do-It-Yourself (DIY) credit repair
Without enlisting a credit repair agency or software, you can take the DIY route. This is only possible if you feel up to the job. The minimum requirement is having some experience disputing credit information. Additionally, you have to be extremely good at potentially tense negotiations. Knowledge of your basic right including Fair Debt Collection Practices Act comes in handy. This federal law limits creditors’ collections from debtors and it is managed by the Federal Trade Commission. Understanding this law will protect you from hostile creditors.
You also need a copy of your latest credit report before embarking on DIY credit repair. Have a report from Equifax, TransUnion, and Experian. Details on a report from one credit bureau might miss on the report from another. This allows a thorough review of each report while highlighting negative entries. On discovery of a negative entry, report to all three credit bureaus. Open a dispute for the bureaus to investigate the entry and remove it.
Keep this in mind
Some entries need disputing directly with the creditor. Doing this requires writing a cover letter summarizing the dispute with all supporting documentation attached. The proof is very important for the creditor to get convinced to remove the entry. Hard evidence is mandatory to remove negative credit information from your credit report.
Time is essential when fixing your credit
Some negative credit information including derogatory information and public records requires time to mitigate their effect on your credit score. As time passes, the errors have a lesser impact on your score. Over time, all the negative information is likely to disappear from your credit report. This might happen from between 7 to 10 years depending on the nature of the negative information.
Ensure to find ways of eliminating as much negative information as possible from the credit report. Pay past due balances and collection accounts that you owe immediately. The presence of a negative entry in your credit report for some years won’t hurt if you finally pay off. This is better than leaving past due collections to pile up.
When looking forward to improving your credit score, you need assistance from a reputable credit repair agency. This will have experienced and knowledgeable professionals to adopt the right practices to eliminate negative entries from your credit report. Equally important is to give the process ample time for the negative information to eventually go away.