Rebuilding Financial Health
When it comes time to buy a house, having a good credit score affords you various advantages, including access to lower-interest mortgage rates. An excellent credit rating will also help when you start your own business. It will ensure that you may borrow money or extend your credit limit if necessary.
A problem arises when you have a bad credit score and need to borrow money. It is possible to repair your bad credit score. There is no miracle cure, and it often takes time, but it can be done with a good strategy and some self-discipline.
The Cherney Law Firm, LLC is a bankruptcy firm that has seen the damage that can be done when good people experience financial difficulties. We know how to assist you in repairing your credit score.
What’s Considered a Good Credit Score?
Your credit score is also known as your FICO Score. Your FICO Score is calculated using data from your credit reports. These are kept by the three major consumer credit bureaus: Experian, Equifax, and TransUnion.
FICO Credit Scores are generated from the following data:
- Amounts owed – 30% weight
- Length of your credit history – 15% weight
- New credit – 10% weight
- Credit mix – 10% weight
- Payment history – 35% weight
A FICO Score of 670–739 is considered good credit, and above that is very good or excellent. When your credit score exceeds 740, you are considered a “prime borrower.” When it hits 800, you are considered a “super-prime borrower.” Super-prime borrowers will likely get favorable interest rates as they are low-risk.
How to Improve Your Credit Score
It’s essential to assess your current financial standing. You can get a free credit report from the three credit bureaus each year. You can acquire these at annualcreditreport.com. If you stagger your request, you can get four reports per year.
Use these reports to track your progress and tweak your strategy. Once you know where you stand, you can create the proper credit repair strategy.
Look for Mistakes on Your Credit Report
Many Americans are unaware that they have inaccuracies on their credit report. These mistakes reduce your score. Among the most prevalent mistakes are:
- Inclusion of accounts that do not belong to you.
- Incorrect reporting of a closed account or loan as open and unpaid
- Incorrectly identifying a missed payment
- Inclusion of outdated credit usage data
Stick to a Credit Repair Plan
Rebuilding your credit takes time and will not happen overnight. A consistent credit repair plan will provide a systematic approach to ensure results after focused efforts.
Here are some tips to include in your credit repair plan:
- Control your expenditure by focusing on modest, regular, and timely payments. Late payments reduce your credit score.
- Reduce your high-balance accounts and high-interest debt. Utilize credit cards only when necessary.
- Consider obtaining a debt consolidation loan in the form of a personal loan.
- Consult with a credit counseling agency. Use your local nonprofit credit counselor.
- Work your way up to a desired credit score.
Reduce Credit Card Debt
Credit card debt often comprises high monthly debt. Reduce the amount you owe on your credit card balances to improve your credit score. Paying your credit card bills in full each billing cycle will help you spend less on interest. It can also help you keep well below your credit limitations.
Sit down with your credit statements and compile a list of all you owe, including your credit cards. Then, go through your budget and search for areas where you may save money. Even if you have an extra $20 monthly, every dollar you spend toward your debt can help you improve your credit score.
How Long Does Credit Repair Take?
Following a dispute, an incorrect item might take many months to be removed from your credit report. However, the time it takes to repair your credit will be primarily determined by your specific credit history and what you do going forward.
Reducing your credit usage ratio is one of the quickest approaches. Paying off credit cards close to being maxed out (or at least paying down to less than 30% of your credit limit). This will likely raise your credit score after the issuer reports the reduced balance to the credit agencies.
Avoiding Credit Repair Scams
Many businesses and individuals seek to take advantage of unwary consumers needing credit assistance.
You could use a legitimate credit repair company. However, there are many credit repair scammers out there. They are interested in your money and your personal information for identity theft. They guarantee results, urge you to distort facts, say a new identity is required, do not explain your legal rights, and expect upfront payments for their services.
An attorney can help you avoid credit repair scams by providing legal advice, guiding you through the credit repair process, and ensuring your rights are protected. They can review contracts, identify potential scams, and help you make informed decisions.
Additionally, if you encounter a credit repair scam, an attorney can take legal action on your behalf, investigate the scam, and pursue remedies to recover any losses you may have incurred.
How An Attorney Can Help
An attorney can assist with credit repair by offering legal guidance. They can review your credit situation, identify inaccuracies or errors, and provide strategies to improve your credit.
Attorneys can also communicate with creditors and credit bureaus on your behalf, dispute incorrect information, and negotiate settlements or payment plans. Their legal knowledge and advocacy can help you navigate the complexities of credit repair and work towards achieving a better credit standing.
If you are looking for a bankruptcy attorney in Marietta, GA, look no further. Our skilled bankruptcy lawyers can assist with credit repair by:
- Reviewing credit reports
- Disputing inaccuracies
- Negotiating with creditors
- Issuing cease and desist letters
- Helping with identity theft issues
- Providing credit monitoring and counseling
Our skilled bankruptcy lawyers at Cherney Law Firm, LLC, can assist you in creating a credit repair plan that is practical for you to follow and monitor. We can also help you tweak the plan to achieve your credit score goals.
Contact us today to get on the road to an improved credit score rating.
Frequently Asked Questions
Will Closing Unused Credit Cards Improve My Credit Score?
Close credit cards with caution. Closing a credit card seldom improves your credit score. Canceling a credit card account, especially if it has a debt, is more likely to harm your credit score.
How Does Debt Settlement Affect My Credit?
Debt settlement can hurt your credit. When you opt for debt settlement, you negotiate with your creditors to pay a reduced amount to settle the debt, typically less than the entire balance owed. While it can provide some relief by resolving your debt, it can also have consequences for your creditworthiness.