Living Life Abundantly is a lot easier with good credit. That’s not to say that you can’t Live Life Abundantly with bad credit…but again, decent credit makes it much more comfortable!

My niece graduated from 5th grade last week and the guest speaker at her graduation told the graduating 5th graders to respect their parents and to protect their credit. While I’m certain the later went right over their heads, I hope they remember and appreciate the wisdom of those words later in life.

Most of the time people don’t learn about credit until they’ve managed to destroy it. Hopefully this helps you with your credit.

What is credit?
Credit = “time allowed for payment for goods or services obtained on trust”

Credit allows you to finance a purchase without having to pay the full cost up front.

A credit report basically shows how and if you have paid any credit extended to you.

The information on your credit report is used to calculate your credit score. Fair Isaac Corporation also known as FICO, is the company that normally calculates your actual credit score. Credit scores range from 300 to 850. Most lenders consider anything above a 725 credit worthy.

According to Experian, the national average credit score is 692. It is believed that anything below 619 is considered low. So you if you’re between a 300 and 619 there’s plenty of room for improvement!

Why Is Your Credit Score Important?

Credit scores are used to determine if you are eligible to receive additional credit.

A bad credit score suggests that there is a high probability that you will not pay what you owe (or at least not in a timely manner). A good credit score shows creditors that you are more likely to pay your debts.

Credit checks have almost become a way of life. Some jobs require a credit check. Cellphone companies even run credit checks. While many creditors will not extend credit to people with bad credit scores, there are some that will… usually at a much higher interest rate.

If you want to buy a house or your dream car, unless you are paying in cash in full, your credit will come into play. If you apply for a loan to start a business or to fund your child’s education, your credit score will probably be the deciding factor for approval. So clearly you are much better off having good credit!

Understanding The Basics Of Credit Repair & Do It Yourself Methods
Credit repair is the term used for when a person with not so good credit takes steps to reestablish their credit worthiness.

There is no quick fix (at least not legally). Credit repair takes time, patience, discipline, and a change in how you manage and think about money.

Sometimes life happens…

Extenuating circumstances beyond control is usually the cause of bad credit.

However, there are instances when people make bad decisions, live beyond their means, and are just irresponsible with credit.

Before attempting to reestablish your credit it’s a good idea to establish new habits when it comes to spending, borrowing, and paying.

If you don’t make these fundamental changes your credit repair efforts will be in vain.

“Doing the same things over and over expecting different results is insanity.”

Now that we’ve established and understand the basics of credit repair we can move on…

The next step in the credit repair process is contacting the three major credit bureaus which will provide one free copy of your credit report each year.

Experian www.experian.com
P.O. Box 2002
Allen, TX 75013
1 888 397 3742

TransUnion www.transunion.com
P.O. Box 1000
Chester, PA 19022
1-800-888-4213

Equifax www.equifax.com
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111

Upon receiving all three credit reports do a thorough examination.
Credit reports usually include your name (aliases), addresses, social security number(s), employers, credit account details, inquiries, and sometimes public records data. Go through each report with a fine tooth comb look for any omissions, misreporting, out dated accounts, and inaccuracies. *Note the credit bureaus are far from perfect. It is your responsibility to make sure the information they have about you is correct.

• Make a photo copy of all 3 reports.
• Make a list of any discrepancies or errors on each report that you’d like to dispute with a detailed explanation as to why you are disputing the item.
• On the photocopies circle the items you are disputing.
• Gather any supporting documents that support your dispute(s) and make photocopies.
• Send a certified return receipt letter to each credit bureau explaining that the information on your credit report is inaccurate. Itemize the errors. Provide the facts and the reason for your dispute. In your letter ask the credit bureau to remove and or correct your credit report accordingly. Include a copy of your supporting documents and the copy of the credit report they sent you with the errors circled. *Note keep copies of everything you send.

It may take up to thirty days to get a response from the credit bureaus. But there is plenty to do while you wait… to be continued in the next post…

Paying Down Debt

If you have credit cards, pay them down at least to the point that your balances are not 50% or more of your credit card limit(s). If you have more than five credit cards consolidate them down to 2 or 3 at most. If your current income will not allow you to pay down your credit cards,
find a legal ethical way to bring in an additional income. I know a woman that worked full time, with a baby, and went to school. Where there is a will, there is a way. If you want to repair your credit, don’t make it excuses, make it happen!

Lastly, the most important thing you can do in order to raise your credit score is to pay all your bills on time. By doing this, the creditors will not report any negative things about your credit activities. By paying your bills on time, you will be able to raise your credit score. This is the quickest way to improve your credit score.