- The highest possible credit score you can have is 850. Good credit is considered by most lenders to be anything above 720, according to creditscoring.com. Your credit, or FICO, score is based on your payment history, how much you owe, your credit history, the types of credit you are using and new credit inquiries.
- The lower your credit score, the harder it is to qualify for any kind of loan. If you do manage to qualify, your interest rate will be higher if your credit score is low. Insurance premiums are also higher for consumers with bad credit. Repairing your credit can significantly and positively impact your finances.
- Credit repair can raise your score by eliminating incorrect information from your credit report. Law firms like Lexington and Credit Bureau Experts charge a monthly fee for disputing items on your credit report. There are many other companies offering credit repair services, but you can save money by doing it yourself. The first step is to order a credit report from all three reporting agencies. Creditinfocenter.com lists contact information for Experian, TransUnion and Equifax along with a wealth of other information to help you repair your credit (see Resources below).
- Disputing incorrect or outdated information on your credit report is the only way to have it removed. You do not need to pay a lawyer or anyone else to help you repair your credit. There is an abundance of good information online, forums like creditboards.com and websites like creditinfocenter.com can answer your questions and show you the way to an improved credit score. If you can write a letter listing a disputed item from your credit report, you can repair your own credit.
- Beware of the companies who offer to help you repair your credit by giving you a new identity. They imply that you can use a new employer identification number to start fresh, but this is a federal offense and you can be prosecuted for it. Also be aware that the credit repair industry is filled with scams, so make sure you check with the Better Business Bureau before you pay for credit repair services (see Resources below).
