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Why is Credit Repair Important?

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

If you are using credit, it basically means you are using some body else’s money to pay for the goods or services you have just bought. It also means that you have made a promise to repay the loan back in a timely, regular and reliable manner. The American credit system is pretty complicated. However, what must be understood is the fact that you have a credit history and it should be healthy. Every time you request for a loan or a credit card, the creditor will obtain your credit information. This information mainly tells the creditor how you have been financially in the past.

Any defaulted payments on a previous credit will show you up in a bad way. Well maintained credit history will ensure you get the credit easily at low interest rates. However, a bad credit history will ensure you do not get your dream home or that you are not able to rent a house in the perfect locality. Your student loans might be affected too as your bad credit history might make you get a loan at very high interest rates.

The only way to ensure your credit history is fine and your credit score is high is to undergo credit repair. Credit repair is exactly what it sounds like. You will be taking a few steps to ensure your credit score is high and your history is up to date and accurate. The best method to do this is to order a credit report. Credit reports contain all the details of your financial history. They have identifying information. This information helps the creditor identify you. This usually includes name, driver’s license, social security number and addresses. It also has details of every transaction you have made. It has details about all the different loans you have. It has details regarding the frequency of your payments and how late were you in paying it. It has details of any credit cards you might have held and the maximum credit limit it offered. It has details of your payments to the card as well.

If you have ever filed for bankruptcy or have any tax liens, it will show up on the credit report. Most of the information stays on your credit report for seven years. Some information stays longer on your report, if it is pertinent.

Thus, the credit report is the most important document and any credit repair work should begin from here. Credit repair involves keeping yourself abreast and in touch with your credit information. You have to order out copies of the credit report regularly every year and keep yourself in touch. If you find any discrepancy or error in the credit report, you have to immediately raise a dispute. Once this is done, the agency will conduct a thorough investigation into the matter and alter the entry in case a mistake was made. It is a good idea to let the creditor know you are disputing his claim. You can get a credit report from any one of the three main agencies in United States. These include Experian, Equifax and TransUnion.

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