Posts Tagged ‘credit rating’

5 Steps to Boost Your Credit Rating

You are probably in one of those moments when you are fantasizing about laying your hands on that swanky car you saw last week at the auto dealership. Then all of sudden, a pesky thought about your recent bad credit run ruins your mood. You know you cannot get your banker to endorse the car purchase for that reason. Or that you got a splendid credit record and want to better it and thus take advantage of low interest rates. All in all, this article offers you a few insightful tips on how to improve your credit rating.

Step 1: Obtain your Credit Report
Even though you may find it a bothersome task, the first concrete step you should take to repair your credit is to order a copy of your credit report from the three credit bureaus; TransUnion, Experian and Equifax. A brief review of the report can help you identify any accounts that you didn’t open, or those with errors or mistakes. Identity thieves can use your personal information such as social security and bank account details for their own selfish gains. Once you find anything out of the ordinary, it is imperative that you take steps to file a dispute through the credit dispute process mechanism. This process is done through mail or online and usually takes a month or two.

Step 2: Get a New Credit Card
Though your credit record still looks shaky and gives you no impetus to shop for a new card or a loan, get a secured credit card. To obtain it, you should make a deposit against the credit limit. Make sure the card is listed with the credit bureaus. By monitoring this card, the bureaus may boost up your credit rating if you use it responsibly. This goes towards shoring up a positive credit payment history. Handle the high interest rates that come with the secured card by making full, timely payments every month.

Step 3: Renegotiate with Your Creditors
Sift through your statements and credit records to identify delinquent accounts such overdue interest payments and credit card accounts. Pay up on your loans or renegotiate with your banker to prevent them from sending your records to collection agencies. You can also reach an agreement with the collection agencies know as “pay-for-delete”. In this case, the agency enters to de-list an account from your credit score if you agree to pay up any balance on that account. This can also apply to any charged-off credit card accounts.

Step 4: Handle Responsibly Healthy Accounts
The next step to boost your credit rating is to cultivate accounts that are in good standing, as they help overshadow bad ones. Through regular payments, creditors will build up a profile of you as a person who is capable of meeting his debt obligations in time.

Step 5: Document Agreements
Document any loan renegotiations to act as defense against creditors may renege on earlier agreements. This shields you from being levied high interest rates on loans.