Having a bad credit rating is not fun! It can prevent you from achieving many of your dreams, like owning a home or driving the car you have your eye on. It can even prevent you from landing a job. Unfortunately, many people are finding that the effects of the current economic situation has left them with a credit score that is less than perfect. If you are in this situation, you are probably asking yourself, “What can I do to clean up my credit?”
The good news is that it is not all that difficult if you are willing to do a little work! Start by requesting your credit reports from the appropriate company in your country and make a list of each account that will need to be addressed. You will want to dispute these accounts via certified mail with the three credit reports. Make sure that you don’t dispute more than three items at a time – more than this can cause your disputes to be disregarded.
In addition to disputing, a great way to improve your score is to see if you can get a parent or spouse to add you to one of their credit cards as an authorized user. This is called piggybacking and it is a great way to improve your credit score. As long as the account has been opened for a while and has a low balance, you can expect to see significant improvement in your FICO score. (It is important to note that you can only use a parent or spouse to piggyback under the new guidelines.)
Another great way to improve your bad credit rating is to pay off old collections via a pay for delete. This is essentially where instead of settling an account with a collection agency for less than what you owe, you pay them the full balance. In exchange, they delete all negative information about your account from the credit bureaus.
Fixing your credit rating can be a long drawn out process, but its something that is essential to do if you want of have a stable financial future. If you are having trouble figuring out what you need to do to get things sorted out then it makes great sense to get the help of an unbiased financial advisor who will be able to point you in the direction you should be going in order to get you back on track.
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