The majority of people with credit problems tend to find it more difficult to get approval for loans, mortgages and credit cards. Although homeowners may be able to get a secured loan, it is advisable to repair credit report history prior to making an application. Although individuals with less serious issues will be able to quickly fix bad credit, it will take a lot longer for others. There are some fast credit repair methods that will achieve a rapid rating improvement.
Quick Ways to Repair Credit Report History
- Pay off debt with savings. Up to 30% of a FICO score is determined by the amount of money owed relative to that individual's maximum credit limit. Paying off debt with savings helps people with credit problems.
- Reduce credit utilization. Avoid using more than 30% of the maximum allocated credit limit in a single month. It is better to use a small amount of the available credit on several cards. Never max-out a card as it will cause a score to fall.
- Balance transfers. Although a credit card balance transfer can save money, never transfer from a high to a low limit card. It adversely affects overall credit utilization.
- Don't close old accounts. Rather than shutting down an obsolete credit or store card, use it to repair credit report history. Stick to the 30% rule and always pay off the balance within the grace period for a credit score improvement.
Other Advice for People with Credit Problems
- Correct mistakes. Request a report from Experian, Equifax and TransUnion and check for credit report errors. Things to look for include lapsed debts and applications that were never made by that individual.
- Pay punctually. In order to fix credit history, always settle debt on or before the end of the grace period. Failure to do so will make it necessary to repair credit report history again from scratch. Each timely repayment will lead to a slightly higher rating.
- Too many applications. Avoid making too many applications for loans, mortgages and cards because each credit search will show for a period of 12 months. Excessive searches, especially if performed in a short period of time, can be potentially damaging.
- Repair cards. Should that person not have any active forms of revolving debt, consider signing-up to a credit card for poor credit. Limits tend to be low, but making a few transactions and settling the balance will help.
Repair Credit Report History for Credit Approval
People with credit problems, especially the more serious transgressions, are likely to find that fixing bad credit can take quite a while. Unless there is an error, there is no such thing as rapid repair. The above tips and advice will help, but the only sure-fire way to achieve a better credit score is by paying back personal debt punctually each month. Provided that this is done, even someone who has filed for chapter 7 bankruptcy, can qualify for a mortgage in about two to three years time.
Sources
"Improving your FICO® credit score." MyFICO.
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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