Credit repair is a way of improving your credit score or credit health when it gets deteriorated for a variety of reasons. The reason for a bad credit report could be because of an error in CIBIL report such as incorrect mention of default in payment of loan or credit card or it could be that you have actually defaulted. Fraudulent use of your credit card could be another reason for a bad report. Whatever may be the reason, we still need to fix it. Either you can fix it on your own which won’t cost you any money or you can hire a credit repair agency to do that. A credit repair agency is a third party which has prior expertise on how to deal with bad credit reports. It assists in correcting or improving the credit report in order to improve the financial health condition of an individual or a company. The agency helps in working on inaccurate items such as liens, charge offs, debt collection, bankruptcy, foreclosures, late payments etc.
You can repair your credit online or mail by filing a dispute with credit bureaus either yourself or with the assistance of a credit repair agency. The repair agency also coaches you to how to handle your existing credit account in order to avoid further damage.
7 Secrets on how to repair your Credit health
- Check your credit report online
The first step towards building your credit health is understanding the problem itself. A better credit score can help us get lower interest rates and better terms. The credit bureaus such as CIBIL, etc can give you a free report if you sign up on their website and request them online. There are many online credit repair agencies which can help you get the report and analyze the problem.
Once you have signed up by filling requisite information, you can see the credit score and view your report. This report is a summary of your credit history. If you have a score greater than 750, your score is in your favor and you will get loans or credit card based on your term. In case you have a low score, you can check for any discrepancy and raise a dispute online.
- File a dispute through online dispute resolution portal
In previous days, online filing and resolution of dispute was not possible. Customers had to send a physical mail to the bureau office to file any dispute which was time consuming and frustrating. With everything digital, bureaus had improved on their online portals and given convenience to customers to file their disputes online.
It is important to understand which factors are more crucial in your credit report for which you can raise a dispute and how long will it take to resolve a particular dispute. Some disputes can be investigated and resolved within a week whereas some of them take time. Work on the derogatory remarks written in your report and get the inaccuracy corrected. Inaccuracy can be caused due to many reasons. It can be because a credit card company failed to report payment correctly to the bureau or there may be inaccuracy in payment history. An online credit repair agency can help you in raising disputes with the bureau.
- Keep your credit card utilization ratio high
Credit card utilization plays an important factor in your credit report which can affect your credit score. Let us understand what is credit card utilization? Credit card utilization is a ratio of credit utilized to total credit available. Higher the credit and lower its utilization, better is the score. Your credit utilization ratio reflects how responsible a borrower you are to your lender. The bureau recommends credit utilization to be below 30% at all times. There are many ways to improve your credit utilization ratio –
- Increase credit limits
Increasing credit limit also helps you lower your credit utilization ratio. You can do this by requesting a credit card company to increase the existing limit but this doesn’t mean that you also increase your debt. Keeping the debt low is the key.
- Open another credit card account
Another way to improve your credit utilization ratio is to open another account with the same company or different credit card company. Your available credit limit is increased by your new card limit which in turn reduces the ratio and helps in better score.
- Pay down your debt
This is the easiest way to improve your credit utilization ratio says Credit Triangle, an expert in credit repair services. Credit triangle, credit advisors suggest to pay down your debt timely on your credit cards and keep your revolving credit minimal.
If you have trouble paying your debt, then you can take a personal loan at a lower interest loan. A personal loan doesn’t involve revolving credit as you are paying it back through EMI. Interest rates on credit cards are as high as 19 -20% as compared to personal loans.
- Pay-off debt based on interest rate and age
Credit Triangle, credit advisors also suggest to pay off high interest accounts first. “If you are holding one or multiple credit accounts, with one or many lenders, then prioritize to pay –off debt on high interest rate accounts first. Next you should work as per age of your accounts. Pay off the newest one first.
Another way to rebuild your credit score is piggybacking. It is another useful strategy to improve your cibil score with the help of good credit history carried by your parents or spouse. In this case, the person with a good history adds you as an authorized user on his card and you reap the benefits on that. It is a good method for individuals to improve their scores who don’t have credit accounts in the past or people who are having bad credit.
However, you should work this strategy only with a known or trusted person. As a negative impact on their credit report will also affect your score and you might have to lose some points. Many companies often try to lend other individual’s good credit history to the person with bad credit history to earn some money on that. We should avoid these transactions as we never know how much we can trust the company or individual.
- Keep your old credit cards
The age of credit card also has an impact on credit report. If you close your credit card accounts, which you are no longer using, it will negatively impact your credit history. It might increase the credit utilization ratio leading to lowering of credit score over short term. However, if you still want to reduce your credit cards, choose the newest card as it has low and nil history and the impact on the credit report won’t be huge.
- Pay bills on time
This is the most important step towards keeping good scores or repairing the existing credit health. Each and every late payment can hurt your score. So always try to pay your bills on time to avoid late payment flags by the credit card companies or other utility companies.
ConclusionTaking advice from a credit repair agency can be helpful if you are facing difficulty in improving your financial health. Credit Triangle is a Mumbai based credit agency that provides credit repair services across the country. It provides simple solutions to complex financial problems of clients. The experts of Credit Triangle are experienced professionals with more than 50 years of experience in financial management and help clients with free credit reports and assist the client to improve its creditworthiness through fair practices. They also manage the loan and other financial requirements of both individual and corporate. If you are in any part of the country, you can even get online consultation or advice from the company’s expert. They will help you to repair your credit through a digital platform without your physical presence. Hope our points will help your credit score improvement and you will be able to reap benefits from your good credit report.