HOW DO I REPAIR A BAD CREDIT SCORE? By Keith Andreesen

The effects of a poor credit history can be far reaching and hurt you in every sphere of life. If you have a poor credit rating, you can improve it by carrying out what is called a credit repair.

How Can You Start a Credit Repair Process?

You can take the following measures to improve your credit history:

* Get your credit report from your country’s three main Credit Reporting Agencies (CRAs)

* Scan your reports and identify incorrect information, accounts with late payments and charge offs, and accounts that are over the limit

* Dispute the inaccurate information, if any, in the credit report with the CRA and get the report rectified

* Settle any unpaid bills immediately if possible. If you can't clear credit card bills then make sure you at least meet your minimum monthly payments. If you have other debts outstanding, work out a schedule of repayments that is agreeable to the lender - and stick to it. Pay debts first before giving yourself any play money!

* If you are paying some credit card dues on time, continue to make timely payments on them. You can also re-establish your credit by opening up a new account and making timely payments for it.

Clearing your credit report of past delinquencies or mistakes is a sure way of enhancing your credit prospects. Even small problems with your credit report may mar the prospects of getting credit.

Clearing Your Credit Report through a Credit Report Letter

A letter is the preferred mode of communication for clearing your credit report. The key to writing a successful and a convincing credit report letter is to substantiate your claims with proofs. One should try to keep the letter as precise as possible, with professionalism and courtesy maintained at all times. Do not threaten the credit agencies!

Follow these steps to increase the chances of clearing your credit report quickly:

* Get copies of your credit report and highlight the areas of the report that have issues

* Send the copy first to the creditor asking for corrections.

* Send another copy to the credit agency with attached proof.

This process takes time, so be persistent but patient, and keep a record of all correspondence. If you identify that missed payments are the reason for your bad credit history, try to pay off the smaller balances before the bigger ones. This way you decrease the number of creditors and hence improve your credit history a bit.

How Do You Select a Good Credit Repair Company?

Many people turn to companies that provide credit repair services when bills and debts become unmanageable. Searching for the right company to provide you credit repair services is a challenging task. Here are some questions you should ask:

* Will the company provide you the instructions on how to mail the dispute letters or will it handle the entire process?

* Will the company provide you consultation whenever needed during the program?

* Will someone check with you regularly to make sure you have received updated credit reports in the mail?

* Will the entire process be explained to you in the beginning and will you be kept updated of the progress after you have paid the fee?

What are the Benefits of a Successful Credit Repair?

Having a good credit score is vital for many reasons: * Save money on interest: You would have to pay higher interest rates on all types of loans, such as credit cards, if your credit rating is low.

* Obtain a better credit limit: When you apply for a credit card, your credit limit is decided based on your credit rating.

* Pay a lower insurance rate: Insurance companies settle your premiums based on your credit history.

* Avoid paying high security deposits: All utility service providers, such as phone companies, check your credit rating before offering you a service - with a low credit rating, these service providers charge an advance deposit to offset increased risk of default.

* Get a mortgage: All financial institutions check the credit history before lending money to you. You may not get a mortgage at all, or your rates may be higher.

* Rent an apartment: Many landlords check the credit history before renting out their apartment to an individual.

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