Personal Finance Tips: The Truth About Instant Credit Repair

List of things that can negatively affect your credit report or score, the truth about what credit repair companies can actually do to fix problems and what you can do to improve your credit rating.

If you are looking to buy a new house or a new car, your credit may be on your mind. Knowing your credit score and what it means can help you decide if the time is right to buy or if you should do some credit repair first.

When you apply for credit of any sort, a company will look at your credit history to decide what interest rate to offer you, or if they want to offer you anything at all. Your FICO score is a cumulative number that represents what your credit looks like at that moment. Your FICO score will go up and down week to week.

Depending on your past credit and your current credit standings, your FICO number will range between 300 and 850. 850 is considered perfect credit. Anything under 650 may be labeled as "risky". This varies from company to company; each set their own standards as to what is acceptable. There are three major credit reporting companies. They are Equifax, Experian, and TransUnion. Your number or report may differ from company to company.



Debt to income ratio, payment history, closed unpaid accounts, up to date open accounts, defaults and liens are all considered when your FICO score it tallied. The number of times someone has requested your credit score can also influence this number. If there are an excessive amount of requests, this may paint you as desperate for a loan. This may make some companies think twice about offering you a loan or line of credit. Bankruptcies are also accounted for in your FICO score.

Not only are loan companies looking at your credit when you apply for a loan, so are potential employers and potential landlords. You can request your credit report to see where you stand. If you do not like what you see, there are a few things you can do to raise your credit score.

One thing to avoid is a company that claims that they can instantly "fix" your credit, wipe your credit report clean, and erase all debt. Some even guarantee that they can do this. The only thing they can really guarantee is that they will take your money.

There are no quick fixes to credit problems. There are only a few things these companies can do for you, and you can easily do them for yourself. What surprises many people is that credit reports often contain errors that are lowering their credit score. You can write to the credit reporting companies to have these errors removed. Any listed debt that cannot be verified in thirty days must be removed from your report. Outdated listings, those on your report longer than seven years, can usually be removed.

Mistakes are often made about payments and the closing of accounts. You may even find someone else's listing in your report. If you find a discrepancy that might be lowering your score, you can often get this ironed out as well. One thing that you cannot change is factual information. No company can clear away valid debts. If you made your car payment three months late, there is nothing you can do to get this erased from your report. If you defaulted on a loan, that information stays on your report for 7 to 10 years. Any company that tells you they can get rid of these types of factual listings are simply not telling you the truth.

If you find a legitimate credit counseling service, there are a few things to remember. They may be able to help you negotiate a lower payoff amount for some of your debts. However, this may not reflect well on your credit report. If the company chooses to do so, they can list the debt as closed but not paid in full. This can hurt you, even though you think the debt is gone. It depends on the company, some will simply mark it paid in full.

Just as in everything else in life, if it sounds too good to be true, it probably is. Be careful with whom you trust with your credit repair and remember that with a little work, you can do most of this yourself.

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