3 Easy Steps Toward Credit Repair
Stellar credit can get you a lease on an apartment, a mortgage on a home, financing on furniture to fill your new living spaces, or even a loan to buy a vehicle. Many important things come to you only if merchants and finance companies trust you enough to offer you credit.
If you've handled money poorly in the past, don't give up on your financial plans. Take these three easy steps toward credit repair.
The go-to consumer agency
The CFPB is the go-to agency when you have questions or complaints about the financial industry. The agency also works directly with banking and financial companies to help prevent financial harm to consumers.
Following are five major CFPB services that you can take advantage of:
- Ask questions –Ask questions about anything concerning the consumer financial industry. For example, you might want to ask if your credit score is affected when a private label credit card company checks your credit report when you apply for a card.
- Compare financial aid offers – The CFPB partnered with the Department of Education and created a “Financial Aid Shopping Sheet” for comparing student financial aid offers.
- Understand mortgages – The CFPB has online tools for exploring interest rates and understanding home loan options.
- File a complaint – Financial Institutions are often eager to work with you directly to resolve a problem you may have with your account, but if you believe a bank or financial business has violated the law, purposely misled you or practiced credit discrimination, you can file a complaint. The agency will investigate and respond to your complaint.
- Tell your story – You can post personal stories of good or bad experiences with consumer financial products.
Eliminate the negative
If something looks bad to you on your credit report, then it also looks bad to financial firms. Do what you can to catch up on any missed payments or unresolved debt. If you're having problems coming up with the money, contact your creditors directly and negotiate with them for a new payment plan.
Negative information, such as missed payments or bankruptcies eventually drop-off from your report after seven years, but you can speed up the process by being proactive. For past negative items, send a letter to the creditor and ask if they can eliminate the negative information from your credit report. In return, offer to pay off whatever portion of the debt you can afford.
Keep it positive
Pay your bills on time from here on out. Think about automatically deducting payments from your checking account each month or setting up automatic monthly payment plans online, so you don't have to worry about passing the late payment deadline. Paying more than the minimum amount can help eliminate the debt more quickly. If necessary, you may also cut discretionary expenses until you've met all of your financial obligations.
Repairing your credit does not necessarily take a great deal of effort, but it will take time.