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Wednesday, February 4, 2009

Credit Restoration Can Improve Credit Scores

By Carlton Markkrite

If you have tried and been turned down for a large purchase recently due to an insufficient credit score, then you'll have to get started with credit repair in order to be able to receive financing in the future. Though you can sometimes get financing even if your credit is less than perfect, you'll find that a better credit score will equal lower interest rates; and more money in your pocket. Credit restoration is something which you must do in order to get more favorable terms for financing these kinds of large purchases such as a home or a vehicle.

The first step to credit restoration is to catch up with any late payments you may have.; Regardless of how your credit record has been in the past, your most recent credit history is what creditors will look at the most closely. Getting behind on payments can really hurt your credit score.

Catching up on your payments is the first step to credit restoration. Consider selling things you don't use, taking a second job or using your tax return to do this - whatever it takes to become current with your payments again will go a long way towards the credit repair you need.

Getting back on track with payments should be your first step, but you should also be sure to get a copy of your credit report from one or all of the credit reporting bureaus. Look them over carefully to make sure that they are accurate. If you see errors here, write to the credit reporting bureaus immediately to have these matters resolved - the credit bureau will have 30 days after receiving your letter to look into the discrepancy on your credit report.

If you see any debts you had forgotten about on your credit reports, be sure to pay them off.

When looking at your credit report, try to view it like a creditor will. Take your credit limits, for instance. Are they maxed out? If so, start paying as much as possible on these lines of credit to reduce the balance. Creditors look for people with large lines of credit, yes - but they prefer to see unused credit to accounts which are maxed out. Paying down these outstanding balances will help you with your credit restoration.

After paying off your credit cards, you should keep the accounts open. An open account with no balance can help your credit score and looks good as far as having unused credit goes. Having several open accounts with zero balances can be a valuable part of any credit repair plan.

Credit repair can take some time but is well worth the effort. Although it can take more than a year, you can improve your credit score and start to feel a weight lifted from your shoulders. Stay dedicated to reaching your goal and you'll eventually achieve financial freedom.

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