Cleaning Up Your Credit Report
Credit report is an important document that tracks your financial transactions during the last 6 years. A good credit report and score is built over time. If you find yourself with a bad credit report, then your financial options are reduced. Your credit applications can be denied, good interest rates won’t be available to you and you may be reeling under heavy debt. A bad credit report will also make a bad reflection on an employer.
A bad credit report won’t magically sprout into a good one. It takes a bit of planning and patience to get a good credit report and score. At the same time there is nothing Rocket science. Here’s what it’s going to take to clean up your credit report.
Identify your Debt Issues
A bad credit report usually stems from a debt issue. Identify which credit card or loan is pulling you down. Here are a few reasons why your credit report may be bad.
- You’re overspending your credit card,
- Crossing a credit limit,
- Defaulting on your monthly debt payments,
- Your business investment is draining your credit, or
- Large unpaid debt due to an emergency situation
Creating a budget
Once you identify the possible causes of a bad debt report, its time you got your finances in order. The best way to do this is to create a budget. A budget simply accounts for your income and expenditure. A budget lends perspective on your financial situation, how you can redeem it and eventually improve your credit report. Set a limit to your spending so you can save more.
Reasons for bad credit score
The main reason for a bad credit score and rating is because of bad debt. Here in Canada the credit system is so much tilted towards the creditors that an collection agency can go and put something on the credit report and the debtor has to go thru the pains to clear it. So how do your cure it?
- Get your credit Report
Once you get the credit report analyze it to find what are the issues affecting the credit score. This can be some debts which have been taken care off but not reported by the creditors.
- Make the Monthly Payments
Most people suffer a bad credit report because they haven’t been able to make the monthly payments. Using the budget you set up, set money aside so that you always have funds to pay the monthly debt installment.
- Catching up with Late Payments
If you don’t catch up on late payments, they will continue to show as overdue on your credit report and if you don’t take care if quickly, it will look worse and worse. Try to use a sudden influx of income such as a bonus to catch up with it.
- Reduce Credit Cards
Another issue faced by people are too many credit cards. Too many credit cards result in debt which can easily spiral out of control. Sticking to at the most three credit cards will help keep your credit debt manageable.
- Credit Lines not being used
Believe it not sometimes, non usage of credit card for more than an year makes the card inactive and it does not build the score. Use it once in an year, atleast for buying an cup of coffee.
Credit rebuilding Service
In case your credit report is in a terrible state (credit score below 500), you should get in touch with www.ecreditrebuilder.ca They run programs which can help you straighten your credit report.
Of all the options at hand, making the monthly payments consistently and one time, the best one. Stick to it, be consistent and in time, you’ll find your credit report getting better. If this does not work contact an debt consultant from 4Pillars, to understand the best options on how to deal with debt.