How To Fix Your Credit

Looking to fix your credit? You came to the right place. Let's not waste time and dig in right away.

How to Fix Your Credit Report

The first step in fixing your credit is to start with your credit report. If the credit bureaus have bad information on your credit history, the end result won't be pretty.

Get Your Free Credit Reports - Before you know where you are going, you have to know where you have been. Once a year, you can get free credit reports from all three major credit bureaus from a href="http://www.annualcreditreport.com/">AnnualCreditReport.com. It's a good idea to see what credit bureaus are seeing.
Look for Bad Information - The credit bureaus deal with billions of transactions a day. It's almost impossible for them to bat 1.000. So look for anything information that doesn't seem right. See if anything has been sent collections that shouldn't have been. Make sure there are no payments that have been incorrectly posted as late.
Correct the Bad Information - If there is bad information, you have the right to dispute the information in an attempt to get it correct. Each credit bureau has it's own dispute resolution process - it's best to go to their website and read up on that process.

How to Calculate your Credit Score

Now that you have fixed your credit report, your credit score should improve. However to fully fix your credit score, you may want to know how that score is calculated. Unfortunately, Fair Isaac Company, the ones who guards that secret closely. So while we don't know the exact credit score calculation, we do have a roughly idea.

Payment History - 35% - With payment history being a majority of the
Credit Utilization - 30% - If you are using high percentage of your available credit, that's a potential credit risk. One way to fix this is by buy actually getting more credit - and not using it. This will lower your overall credit utilization.
Credit History - 15% - Having a long history of good credit makes Fico believe that you are a very low credit risk. If you have credit cards where you've paid on time for a long time, it's best to keep that card (and it's lengthy credit history) active.
Credit Inquiries - 10% - You want to minimize the number of "Hard Pulls" or "Hard Inquiries." If you are applying for credit, it is best to ask if the inquiry is a hard one or a soft one. You can read more about this at Wikipedia
Types of Credit - 10% - It is best to have multiple types of credit. FICO wants to see that you are using different types of credit.

With that information fixing your credit should be easy.

This post involves: