It is very important today more than at any other time in history to have good or great credit. Unfortunately never before have so many people been burdened by large and unmanageable debt and ever decreasing sources of income. With high unemployment rates devastating large segments of the American working public, many people are now faced with mounting high interest credit card debt and their inability to make payments. The consequences of our current recession and poor economy is that a lot of people who formerly had impeccable credit ratings are now seeking self help credit repair in order to improve their overall scores.
The first thing that one should know when attempting self help credit repair is that the credit rating system is rigged against you from the start. In many ways it can compare to a casino where no matter how much luck you think you have, the house always wins in the end. Credit card companies and retail financing companies are the ones that invented the entire credit rating and scoring systems that are in use today. These systems are complex and unintelligible but to a few who have spent many years studying them.
The average consumer thinks that by paying his bills on time that he or she will be on their way to having a great credit score. Normally this is true but there are a lot of other factors that go into having a great credit score. You need to know that having too much credit and too high credit balances can be as detrimental as not having enough credit card or consumer debt.
Before one starts on a program of self help credit repair they need to know what their credit score is. Credit scores, or FICO (Fair Isaac Company) scores are usually rated from 400 to 900, with 900 being the best. Very few people in the world have 800 or better scores. A great credit score as judged by most banks is anything above 700 or 720. One can get a free copy of their credit report by requesting it in writing from one of the three major credit reporting agencies. These agencies are Equifax, Transunion, and Experian. You can go to their websites and request a free copy of your credit report which they legally have to provide you with.
The three FICO scores you get back will all be different. Banks usually use either the lowest or the mid score for purposes of approving credit card applications or loan applications. If your score is low you need to read the report carefully and see if there are any reported late payments. In order to do the self help credit repair you need to first identify which of the late payments has been reported in error. Once you identify the error you can then use the agency websites (www.experian.com, www.transunion.com, and www.equifax.com) to dispute the erroneous reports. Once they receive the disputes, the credit reporting agencies will request verification from the creditor. The creditors have a fixed period of time that they need to respond to the dispute query. If they do not respond in time, the credit reporting agencies must delete the negative items from your credit report.