How to Recover From A Bad Credit Score

Can You Recover From A Bad Credit Score?

Do You have a bad credit score ? You are not alone. Discover how you can recover from a bad credit score. Read on to learn how you can regain financial freedom.

Understand the powerful mechanisms of credit repair

Getting a bad credit score is one of the most normal things you can experience in a lifetime—simply because, life happens. Divorce, lay off, medical conditions, contract termination and improper money management are just some of the culprits of bad credit. But can you recover from a bad credit score? Even the most powerful business can crash overnight, or the most stable employment can be one of the casualties of retrenchment. That is why raising a credit score is one of the most sought after goals—but it can be a very discouraging task even for the most enthusiastic individuals.

A bad credit score taints your creditworthiness. People start to question your ability to manage debts and to handle your finances.

If you think of it, not only the creditors, but employers, utility providers and almost everyone interested in your credit file might question your character. Does this person pay on time? Will he stick to his promise of repaying me when times get tough for him? Should I promote this guy and entrust him my company when he can’t even manage his credit cards? But the truth is—no one wants to have a bad credit score.

If you have a way, you will surely pay off your debts and get on with life debt-free. It’s just that-there are temporary glitches in life that could lead even the most organised person’s credit to hit rock bottom.

Credit Repair Process

You can recover from a bad credit score through the process of credit repair.

A simple 5-minute call to a company such as Clean Credit can provide you with access to your credit file. This contains information about the lending companies and banks that gave you loans in the past, your debts within a certain period, your credit cards with their corresponding credit limits and the payments you have made. You will also see which creditor looked into your file these past two years.

Review your credit history. You can use a credit repair tool to thoroughly assess the entries. The results of your assessment will help you determine the best course of action to make. Look for negative listings that may warn lenders to reject your application whenever you apply for a credit card, loan or mortgage. Watch out for unpaid debts, late payments, lines and fines and other bad marks that lenders may count against you.

What should I do when the creditors did not correctly report my credit information?

Let’s say your Credit Card A has a credit limit of $4000. You only used up $1000.  If the report says that your balance is $1000 and your limit is $1000 when it is actually $4000-it will appear that you already maxed out your card. It could actually hurt your credit rating because it looks like your utilisation rate is 100%.

The amount of your revolving credit you use with regard to your available credit can account for up to about 30% of your credit score. So, you may never have a lien, bankruptcy or judgement record, and you have been paying all your debts on time—but you can have a low credit score simply because it appears on your credit report that you have maxed out your credit cards.

Send a letter to your credit providers who submitted erroneous or inaccurate entries into your file.

No matter how efficient an organisation is, it can still make errors and omissions, such as wrong entry and inaccurate details. They may link your information with another person’s personal information, especially if you have the same names. That is why, it is very important to get your free copies of your credit file each year to ensure that there are no errors in your report and all the entries belong to you.

In the above example, what you can do is to get a credit repair tool to guide you on how you can correct the report. There is no need to hire a professional credit repair company do it for you, unless it is a serious matter.

What about other negative entries in my file?

Perhaps the payment record was not yet updated, or the debt was wrongfully recorded in your account. There are also cases of identity theft that could make a huge blow in your credit file. You can also send a letter of dispute to the credit reporting entities along with copies of your payment records, or other documents to prove your claim. For those errors that cannot be verified, the credit reporting company may contact your lender, and if they don’t respond, the entries will be removed from your credit report.

You can negotiate a settlement with your lender so that they will give a positive remark on your credit records. It may not always work, but there is really nothing wrong in trying out this option.

As you can see, there are many ways to recover from a bad credit score. Make an enquiry with Clean Credit today so we can help improve your credit rating and fix your credit file.

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