- Your credit score affects many things in your life. The most obvious is your ability to get a loan. If you have poor credit, you will not be able to get a good loan, if you can get one at all. However, a credit rating that is in need of repair can also affect your ability to get a job, since employers will sometimes look at your credit rating to determine if you are a responsible person.
- Credit repair takes time. Any company that promises you instant repair to your credit score has something to hide, because it takes several months to raise your credit score significantly, unless there are errors on your report that you can fix. The length of time it will take to raise your score depends on what is harming it. For example, most bankruptcies and delinquent accounts can stay on your report for 7 years. Tax liens will stay on your account for 15 years. Inquiries will remain on the account for 2 years. You can counteract these negative items by adding positive accounts to your report, but it will take time for the positive to counteract the negative.
- Some people think that closing the credit cards that they are no longer using will quickly raise their credit score. This is not true, because one aspect of your credit score is your credit history. The longer you have had a particular item, the better it will affect your credit score. Closing too many cards that you have had for a long time can actually lower your credit rating a little bit. Instead, pay down the balance, but keep the card or account open.
- If you need to repair your credit score, start by making all of your balances current. Then pay down your balances as quickly as you can, but pay attention to how you are paying them. Pay each balance so that it is a third of the credit limit on that account. Accounts that have balances that are close to the credit limit will damage your score. Also, check your credit history for errors, and have them corrected if you find them.
- Approach credit repair companies with caution. Much of what they can do for your credit score you can do on your own for free. No company can fulfill a promise to improve your credit score magically. This takes work on your part, no matter who is helping you. If you do need to use a credit repair company, shop carefully to find one with reasonable fees. Also, make sure that the credit repair agency will help you learn how to manage your money so that you do not end up in credit trouble again in the future.
