The credit history and credit record plays an important role in determining whether credit repair measures are to be resorted to. The credit report contains records of your credit history over a period of time. This leads to calculation of the credit score which indicates precisely whether or not credit repair is to be opted for.
The credit history is the record of your past borrowing and repaying with information about late payments and bankruptcies. The need for credit repair arises when there is adverse credit history or bad credit history. This is also referred to as sub-prime credit history, non-status credit history, impaired credit history or simply poor credit history. This is concluded when a negative (below average) credit score is determined for your credit report by the credit rating agencies.
Negative credit rating is perceived invariably by all lenders as undesirable for extending credit. Your loan applications may even be turned down by a number of lenders. Some others may grant loans but at difficult terms and conditions. It is upon detection of such below par credit score that there arises the urgent need to advocate credit repairing measures.
Your poor or adverse credit history can certainly improve over time by following the right credit repair steps. Howsoever bad your credit position may have become you can take some steps to correct the situation. A step by step procedure may be followed. You need to procure a yearly (free) copy of your credit report and check for errors. In case of any error detection, an immediate notification is to be made with the lenders and the reporting agencies. Paying out all your bills on time and avoiding late payments helps a lot.
A reduction in the number of credit cards carried by you is suggested. You need to report the changed status of your accounts (after reduction) to all the three credit reporting agencies.
You need to avoid bankruptcies, tax liens and collections. An instance of bankruptcy can remain on your report for up to 10 years while collection accounts and paid tax liens stay on credit report for seven years.
You can request in writing so that your creditors reduce the credit limits on your account so that your amount of available credit gets lowered. You may ask a family member of a friend to co-sign on a small loan or credit. This will help you re-establish credit. You also need to make timely payments towards this.
Finally, you need to obtain a secured credit card which will help you reestablish your credit. It is suggested that you keep a designated amount in the account which will be sufficient to cover your charges. You should take care to make payments here on time.
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