Time and good habits will fix your credit score
July 31, 2009
Recently I’ve heard from more and more people who want to know how to “clean up” or “fix” their credit reports.
With lenders using stricter standards to screen out risky borrowers, credit reports and credit scores seem to have taken on a whole new importance for people.
The bit of bad news is that if you’re someone with a bad credit history, there is no quick fix for your credit report. Only time can remove negative items that are accurate from your report.
In general, negative items will remain on your credit report for seven years. A bankruptcy can remain on your report for seven to 10 years.
You should review your credit report from each of the three credit reporting bureaus (Equifax, Experian and TransUnion) once a year. You can get a free copy of your reports at www.annualcreditreport.com. If you do see a negative item that is on your report in error, you should dispute the item with the credit reporting bureau. If you get your reports online, you can also dispute any incorrect items online. The web site will guide you through the process.
As time goes on, the negative items will carry less weight. Though it won’t remove the negative items, it may be helpful to pay any accounts that are past due and/or are in collections.
After that, the best thing you can do is to begin to rebuild a positive credit history.
Start by making sure that you pay everything on time. Past due accounts and collection items really hurt your credit score. You need to show potential future lenders that you are responsible and pay your bills on time.
If you have outstanding balances on your credit cards, pay off the balances. Once your cards are paid off, use them sparingly. Charge only a small amount each month and pay that amount in full.
With a little patience and wiser use of credit you can raise your credit score and make yourself more credit worthy.
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