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Credit Repair Explained in Basic Terms

By Janet Lacey
Published: Wednesday, October 28th, 2009

You might have heard of the term credit repair a lot of times. However, very few people actually understand the term credit repair. The credit system in the United States is very confusing and long winded.  Credit repair, put simply, is when a person takes a personal interest in his credit history and takes steps to repair any kind of damage on his credit report. United States is a country based on credit and lending. Most of the finances involve some form credit and lending. Therefore, if you are looking at an investment option you will have to consider lending. Any credit or lending option will be dependant on you credit history. A good credit history will directly translate into the best of the available options. However, a bad credit history will ensure you do not get the credits you wanted. A house in a great locality or a student loan for a course in the perfect college, every thing depends on a good credit history.

Credit repair is the process where you repair your credit history and fix any problems in your credit report. It starts with a few simple and basic steps. Your credit report contains all the details of your financial transactions. This is the report that a creditor or a lender will check on before he lends you money. As soon as you request a credit, the creditor will order a credit report. This credit report is manufactured by three main agencies. They are TransUnion, Experian and Equifax. These agencies get the information in a regular manner from various banks, courts and post offices. You can also order a credit report from any of these agencies.

A federal law enables you to get a free credit report from each of these three agencies.  The creditor gets your report and goes through your financial history. Based on the details available in your report, he will decide whether you are eligible for the credit or not. The credit report will also decide the rate of interest you will be getting. Therefore, it is your credit report that is going to decide on your future credits. Every single detail of your payments will be available on these reports. The creditor can see how punctual and prompt you were with your payments and he can decide based on this information.

Repairing your credit is of paramount importance. You will be able to repair a lot of damage with this process. You will also be able to get the best of the credits and maintain a high credit score. The most important part of credit repair is staying in touch with all the information. Order regular credit reports and keep a tab on all the information. The moment you find a negative entry, raise a dispute and request an investigation. The agency has to conduct an investigation and correct the report. It also has to send you a copy of the report. The process would get a lot easier if you hired a credit repair firm. These are experienced professionals who can get the job done for you much faster.

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