Negative entries on your credit report lower your credit score, and a low score has an impact on your financial life. You might have trouble getting housing or buying a car. If you do get a loan for a car or home, the interest rate will be much higher when you have bad credit. Credit repair counseling may help your situation by clearing up your credit report when possible and by helping you build a stronger credit profile going forward. Here are some strategies they may try.
Remove Mistakes from Your Credit Report
If there are errors on your credit report, you definitely want them removed. You can file a dispute and the creditor has to respond with proof of the late payment or other reason for the bad report. If the creditor can't explain the error, then it should be removed from your report by the credit bureau.
Try to Get Late Payments Removed
Depending on your situation, the credit repair counselor might suggest trying to get other bad marks off by filing a dispute. If for some reason, the creditor doesn't respond during the required time, the late payment or another negative mark could be removed. You can file a dispute with the credit reporting agency or with the creditor. However, getting valid negative reporting removed from your credit history isn't always possible, and it may not be a good approach depending on your credit profile. Instead, you may simply need to let your credit report age. Late payments have less impact as they get older, so you'll have to be diligent about keeping payments current going forward and your credit score should gradually rise.
Work Up a Plan to Pay Down Debt
If your credit cards are maxed out, that hurts your credit score. By paying down your cards, your score will gradually go up. A good plan for rebuilding your credit might be to put a freeze on applying for new credit and work hard on making payments on time and paying off your credit card balances for a couple of years. If you can pay off your cards and maintain a history of timely payments for a few years, then your credit score should improve even though you've had a history of credit problems.
Paying off a large amount of credit card debt isn't easy, so getting advice on the best way to tackle the problem could be a good idea. Some things that may not help include moving the debt around to a single card or taking out new credit to lower your overall credit usage percentage.
Credit repair counseling helps keep you grounded in what's possible. You may want to buy a new house right away, but there might not be a quick fix to your credit problems. While you might see a jump during the next 30-day reporting cycle and a jump with each negative report removed, it will probably take time to see a huge improvement unless you can pay down your credit card balances right away.
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