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What is Credit Repair?

By Janet Lacey
Published: Sunday, September 20th, 2009

Credit repair is a term often heard but rarely understood. The credit system in the United States of America is confusing enough. Credit repair is basically when a person takes interest in his or her financial status and takes some steps to repair it. The United States works on credit and lending options. If you are planning on any kind of investment, you are going to need some kind of a lending option. A good credit history will assure you get the best of the options. However, if you have neglected your finances and not taken care of them, the chances are your credit history is badly affected. With a sub optimal credit history you can rarely get the required options. You might need a good house in a locality of your choice or a good student loan with low rates of interest. However, all of these financial options are dependant on you credit history.

Credit repair starts wit ha few basic steps. You credit history is available on your credit report. Whenever a creditor is considering you as a client, he will run a background check on your credit history. The credit report is used for this process. There are three main credit report providing agencies in the United States. These are Experian, Equifax and TransUnion. A creditor might use on or more than one of these agencies. The law says that you can get a free credit report from each of these companies per year. Once he gets his hands on you credit information, he gauges whether you are willing to repay your loan and will your repayments be on time. The credit report will have all the information he needs to make this decision. This report includes all of your financial details. Any credit cards or loans you might have will be listed on this report. If you have filed for bankruptcy, it will show up on the credit report. It will show how regular you have been in your payments too.

Thus, repairing your credit should start with the report. Credit repair mostly involves keeping yourself abreast of your credit information. You need to order copies of the credit report more than one time during the year. You need to check all the information on the report. You should ensure that all the information is accurate and truthful. You should ensure there are no mistakes or discrepancies. If there is such a problem, you should take care of it immediately. Raise a dispute as soon as possible to prevent any further damage. You can raise disputes with the credit agencies who will conduct a through investigation. This is one of the most important steps you will have to take if you have filed for bankruptcy and are looking to rebuild your finances.

There are many credit repair services in the market. These credit repair services cost much lesser than attorneys or credit counselling services who charge a lot of money. These credit repair companies help you to maintain a perfect credit report without a lot of hassle.

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