Your credit rating can often determine whether or not you are approved for loans such as mortgages or car financing. It can also affect what interest rate you receive and therefore how much your monthly payments are. It is important to maintain a good credit rating since once your credit has been damaged, it is equally important to immediately begin the process of repair. While repairing your credit there are several steps that should be taken. These include changing you spending habits immediately. Stop the behavior that led to the financial troubles in the first place. Lock away the credit cards and create a budget.
Add necessary information to your credit file because your credit can be damaged by information that has been omitted. You are entitled to add up to one hundred words in the case of a credit dispute. This explanation will be provided to all creditors who request information. You can also request an investigation if you feel something has been reported by error. If the investigation proves something was reported inaccurately you can request that a corrected report be sent for free to anyone who received the bad information in the last 6 months.
Always negotiate your payments with creditors either individually or through an attorney or credit counseling service. Many creditors are willing to negotiate in order to receive some kind of regular payment. Many lenders also look at continued payments favorably if you ever need to apply for credit in the future. If your account has been place in collections, it is much better to deal directly with the original creditors than it is to deal with the middle men.
Be wary of companies guaranteeing that they can get rid of your bad credit. This should raise some large red flags. Many of the companies in this line of business are participating in scams. Never pay them money before services are provided. Be aware that regaining good credit is not an overnight process. By law creditors can report negative credit for seven years and a bankruptcy can be listed for ten years. By taking quick action to implement the above mentioned steps, you will be on your way to repairing your credit.