Credit Repair – What Exactly Is It?
Your credit score is the lifeblood to a lot of financial opportunities, like buying a car, financing a home or taking out some other sort of loan. But when you’re credit isn’t exactly up to snuff, taking the proper steps to improve it in order to make yourself a more attractive customer and allow you to qualify for low interest rates, is essential.
And that’s exactly what credit repair is – anything that will either improve or increase your credit score to make you a more attractive customer. This post will take a look at some of the common things you can do to repair poor credit.
“The Three Ups”
So now that we’ve identified the process as anything you can do to either improve or increase your credit score, it’s time to take a look at some of those practices that you can put in to action today. These strategies are often referred to as “the three ups”:
- Clean Up: This involves working to remove any – or as many as possible – of the negative items that are on your credit report. Some of these items may be there by error (after all, it is estimated that as many as 42 million Americans have some sort of error on their credit report), others may be past blunders. While you may not be able to clean up every negative mark, it is likely that you can get some removed.
- Build Up: This “up” involves having good, healthy accounts that you pay on time. These accounts are reported to the credit agencies each month and can help bring up the credit score. After all, paying bills on time is one of the biggest factors in determining a credit score.
- Pay Up: Finally, there’s the aspect of paying up. This involves not running away from debts and collections, but meeting them head on and coming up with a way to settle them. Think about it. If you never pay up and settle your debts, they’re going to be hurting your credit score – and prolonging any credit repair efforts – for a long while.
In a nutshell, credit repair is exactly what it sounds – it’s the act of fixing your credit and thereby improving your financial buying power. But it is not something that can be completed overnight, in most cases it can take months, perhaps even several years to see a noticeable difference. That’s why it’s important to commit to repairing your credit and coming up with a plan to do so. Fulfilling it can take your credit score from poor to good, or from good to excellent, and the real winner will be you.