Credit repair involves restoring poor credit standing that has worsened due to a variety of reasons. Here’s a basic guide to credit repair, regardless of where you live in the U.S., including Arizona:
Obtain Your Credit Reports
First, determine your current standing. Request a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion) once a year through www.annualcreditreport.com.
Review Your Credit Reports
Examine the information for errors or inaccuracies. This might be an erroneous amount, an account you never opened, or a late payment that you know was made on time. If you discover any mistakes, file a dispute with the credit bureau that has the wrong information. They are required by law to investigate and fix any discrepancies.
Pay Your Bills on Time
Your payment history has the greatest influence on your credit score. Pay all of your bills on time, not just your debt or credit card dues. Your credit report may include unpaid utility bills or rent.
Reduce Your Debt
High debt levels might have an adverse effect on your credit score. Try to lower the amount of debt you owe if at all feasible. This will also reduce your credit usage ratio, which is a credit score factor.
Keep Your Credit Utilization Low
A decent rule of thumb is to never utilize more than 30% of your available credit at once.
Don’t Close Old Credit Cards
Another factor in your credit score is the age of your credit. Even if you no longer use an old credit card, don’t cancel it. The card’s age could help you strengthen your credit score.
Limit New Credit Applications
Applying for new credit lowers your credit score.
Improving your credit score takes time, and there are no quick fixes. Some companies promise to quickly improve your credit score – these are often scams. Seek the services of a non-profit credit counseling agency. It provides personalized advice and a plan to improve your credit score.
In Arizona, you can look for accredited agencies through the National Foundation for Credit Counseling or the Financial Counseling Association of America. Research any credit counseling agency you consider to make sure it is reputable and registered.