Here is a complete guide about credit repair and even a DIY credit score calculator to help you understand how to repair your credit on your own.
Whether you like it or not, your credit score affects your ability to get a loan for a home or car, rent an apartment, open new lines of credit, or even sign up for a phone plan. It could even impact future employment opportunities.
The good news is that you can take steps right now to repair your credit and raise your credit score just by understanding the basics. Yes, it will take some time, but not as long as you may think. If you’re ready to fix your credit score and take steps toward a healthier fiscal future, we’re here to help guide you through the process. Here is a complete guide about credit repair and even a DIY credit score calculator to help you understand how to repair your credit on your own.
DIY Credit Score Calculator
Your credit score is determined by five factors, three of which are based on how well you pay your bills (payment history). Two other factors assess the metrics based on things like recent changes in income or bank accounts that might affect one’s ability to meet future financial obligations. Here are the five factors that impact your credit score…
What to Check
- Payment History – Your payment history greatly influences your credit score, in both good and negative ways. Missing payments on utility bills, credit cards, and monthly subscriptions for over 90 days, can all contribute to sending your credit score into a freefall. That’s why it’s so important to stay on top of your payments. You may want to take inventory of all monthly subscriptions and “trim the fat” by pausing or stopping unneeded subscriptions. This may work to give you some short-term financial relief as well as prevent more delinquent charges from showing up on your credit report.
- Credit Utilization Rate – Sometimes referred to as your credit utilization ratio, your credit utilization rate represents the amount of credit you are utilizing divided by the value of your credit limit. It generally is calculated as a percentage. And while there is no magic number, credit experts recommend using no more than 30% of your overall line of credit at any given time. For example, if you have a $4,000 credit limit, you shouldn’t have a credit card balance over $1,200 in any given month.
- Credit History – Use a DIY credit score calculator to get an overview of your current credit standings to best understand your entire credit history. Your credit history is the overall scope of all open accounts, closed accounts, overdue balances, and current money owed on any credit cards over a long period of time. This would also include any loans you may have as well.
- Diversification – This accounts for 10% of your credit score. Credit diversification, otherwise known as a diverse credit mix, is how varied your overall lines of credit are. Meaning, having a healthy and diverse mix of credit demonstrates to lenders that you can successfully and responsibly handle different types of loans and credit cards.
- Credit Inquiries – Credit inquiries can shave points off your credit score in the short term, but you should know the difference between hard and soft credit inquiries. There are two types of credit inquiries, hard and soft. Hard inquiries tend to happen if you attempt to buy a new car and need a loan, open new credit cards, or apply for a cash loan. These inquiries do show up on your report and do affect your credit score. Soft inquiries, however, will not show up on credit reports and are simply conducted to evaluate your credit-worthiness.
Now that you know about the five factors that impact your credit score, let’s help you understand how to fix your credit on your own with some credit score calculator tips and tricks.
Fixing Your Credit On Your Own
Repairing your credit report is one of the best ways to fix your credit score. While you can always hire a Los Angeles credit repair company to assist in fixing your credit, it can be costly and you may be able to do it all on your own. Credit repair agencies will likely take the same steps to repair your credit as you would. So just take it step-by-step and you’ll be well on your way to boosting your credit score.
One of the best tools you have at your disposal other than a DIY credit score calculator is taking advantage of obtaining a free credit report from Experian, TransUnion, and Equifax. You can request a free credit report once a year. Your credit report will vary on each platform, so compare them to one another. Look for discrepancies. If you find any inaccuracies you may be able to file a dispute to get any anomalies removed, thus raising your credit score.
Credit Report Dispute
Sadly, it’s not uncommon to find errors on your credit report. Credit reporting agencies are mostly human (maybe) and make mistakes all of the time. A computer error or a typo can drastically throw off your credit score. The good news is that you can catch these issues and dispute them by looking closely at what appears on your credit report. One of the best ways to be your own credit score calculator is by grabbing a stack of bills, receipts and debts paid, going online, and comparing those numbers and dates with what’s on your credit report. If things don’t match up, you may be able to file a dispute.
The Fair Credit Reporting Act (FCRA) requires that creditors report accurate information at all times. With fraud at an all-time high, it is important to review each delinquent transaction and ensure that it is legitimate and you actually owe that debt. Here is a comprehensive credit dispute checklist that you may want to quickly run through if you think you have charges on your credit report that seem incorrect. If one or more of these elements is incorrect, you may be able to dispute the charge. Hold creditors accountable and report any inaccurate information. You will need proof to successfully dispute incorrect information on your credit report.
- The incorrect spelling of your name, middle names, and initials
- Check names of relatives
- Names of authorized users and co-signers
- Phone numbers
- Account limits
- Account balances
- Creditors names
- Collection agencies
- Duplicate names
- Dates that accounts were open and closed
- Hard inquiries
When you find errors on your credit report, like mistakes in the accuracy of information or data that is reported to credit agencies such as banks and creditors, you should open a dispute. You can do so over the phone call, through email, or formal letter to share any and all supporting documents. By keeping detailed records of all your past transactions and credit history, you can then share this information with creditors to fix inaccuracies. Take a record of all communications with creditors and credit agencies for future proceedings.
Keep in mind that filing multiple disputes at the same time may have a negative impact on your credit score so it’s best to space them out so your score doesn’t yo-yo. Plan to space out your credit disputes, should you notice multiple inaccuracies. Unfortunately there is no quick fix for fast-tracking credit disputes. The window of time in which credit bureaus handle individual disputes ranges from 30-45 days, so be patient to get the desired outcome.
Credit Repair Services Los Angeles
If you have fallen victim to a poor credit rating and your credit score has been negatively impacted, American Credit can help you repair your credit and raise your credit score. Negative information on your credit report can drive down your credit score. However, errors can be disputed. We employ a pre-litigation process to encourage creditors to report information correctly, which is more effective than sending a dispute letter. To learn more or receive a free credit consultation, call 855-213-1043 today.