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Friday, February 27, 2009

How To Fix Bad Credit

By John Cooper

There are two steps to fixing bad credit.

1.Remove negative items from your credit report.

2.Create positive credit building accounts.

Lets talk about the second part first because this is much easier. You should open a new line of credit and make monthly on time payments. Additionally pay all your current bills.

This will help build a trail of positive on time payments on your credit report. We suggest an unsecured Visa or MasterCard, however if your credit is really damaged then you may have to open a secured card.

The second step is removing derogatory items from your credit report. This is by far the most effective method of raising a damaged score. If you do not remove these items it will not matter how many positive reporting lines of credit you have because the derogatory marks will continue to damage your score.

However there is a lot of inaccurate information that says you can not delete an item from your credit report without waiting seven long years. This is not true.

The credit bureaus have spent millions of dollars creating this falsehood. The reason they do it is because it costs them time and money to investigate disputes.

Also the bureaus have created a rumor that credit repair is illegal. This is false.

Not only is credit repair legal the government has passed laws to protect you and your credit. The Fair Credit Reporting Act passed by Congress says that a listing can only remain on your report for a maximum of seven years. It says nothing about the minimum amount of time a listing must remain.

It may not be the most ethical to dispute a mark you know is accurate, it is your government given right. You will never face any legal prosecution, jail time, or fines for disputing any item.

Also how ethical is it for creditors to charge you outrageous interest rates, late payment fees, and over the credit limit fees. You can have 20 years of good on time payments but once you become delinquent you are hit with the fees.

Unfortunately life throws a lot of curve balls such as; illnesses, unemployment, medical bills and a whole lot more. How ethical is it for you to be punished for a catastrophe for seven long years even if you had been a model customer for 20 years or more.

In sum you dont just have to live with a bad credit score you can remove the negative items off. This will help you achieve the score and the life that you and your family truly deserve.

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