Fixing Your Credit

Having good credit is more important in today's world than it has been in quite a while -- if you are planning on getting a mortgage loan, you need to have good credit.

Three years ago, it really didn't matter what your credit score was - you could find someone to loan you money regardless of what your credit score was. But times have changed and banks have gotten tougher when it comes to credit scores.

Which is why many people are being referred to a "credit repair company" if they apply for a loan and have lousy credit. If you have bad credit and can't qualify for a mortgage, what is credit repair anyway?

Credit repair is nothing more than the process of questioning the information found on your credit report with the intention of finding and correcting any mistakes or inaccurate information that you find. As a result of correcting these mistakes that you uncover, your credit score will increase.

The process of questioning items found on your credit report means that you will need to write letters to the credit bureaus about specific items found on your report. The process of writing these letters can typically take between 3-9 months depending on how many items that you are questioning and asking to be removed.

One of the more common questions about credit repair is "is it legal" and the answer is yes - it is completely legal as long as you are attempting to remove only the inaccurate information.

A few of the key things to fix when fixing your credit report:

• Any accounts that have been "charged off"
• Any late payments
• Any collection accounts
• Any other negative items that are not accurate
• Any credit limits that are not correct
• Any accounts that are listed as "paid charged off" if you paid on time and in full
• Any accounts that are listed as "paid derogatory" if you paid on time and in full
• Any accounts that are listed as "paid as agreed" if you paid on time and in full
• Any accounts that were a part of a bankruptcy and were discharged as part of the bankruptcy process. Any accounts that were discharged in bankruptcy should be listed as "discharged in bankruptcy"

If you are like most people, you will find that the actual process of "fixing your credit" will not bring you "perfect" credit, but you might be surprised to find how many people raise their score just by cleaning up the derogatory information that is on their report.

And in today's mortgage lending world, even a bump of just a few points may mean the difference between qualifying for a mortgage and not qualifying for a mortgage - or in other words - it can make all the difference in the world.

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