Yes, cleaning credit is legal; but it is better called repairing credit than cleaning it. Of course it is legal to redeem yourself. Only do not fall for the ‘new credit file’ scam. This is illegal and it will definitely land you in a lot of trouble. There are ways to come out with a good credit report but be prepared to work hard and be consistent at it. It is definitely easier to spend money than save money and that is exactly the first thing you should aim to do to make your credit report look good.
Repairing or cleaning your credit will not be easy, but if you want it bad enough it will definitely be worth the effort. Check out the most important steps that could set you free:
1. Check the accuracy of your credit report – it is very important when you have a bad credit report to check whether everything recorded in your report is correct. For you each and every penny of debt is a negative element. Hence, ensure that you go with a fine comb through your report and when and if you find any discrepancy, immediately write to the bureau requesting to correct the mistakes. Ensure that you enclose the necessary proof and documentation to support your claim.
2. Save, save, save – your saving would reflect very well on your credit report and help you in getting a low limit credit card or loan at a later stage. Try to save at least 15-20% of your total income so you could have a base.
3. Regularize your present payments – consolidate your debt if there is no way out, but start being extra regular on all your payments. Late payment, no payments and part payments all attract negative markings on your credit report. In order to repair your credit you have to show that you are responsible and consistent in your financial transactions. Always ensure that you make you payments on time.
4. Improve your debt to income ratio – work in such a way that you maintain a good income to debt ratio, i.e. the debts you owe should not cost you more than one third to repay. This is the hardest part, but if you cut off all the extraneous expenses and concentrate on the basics you would definitely be able to do so soon enough.
Each one of the above measures is one step towards a better financial credit report. It takes time to rebuild your credit – true enough – but once it is there you can do wonders with your life. Come to think of it, financial discipline is not such a bad habit to cultivate. Learn to live within your means and come what may always put a little aside for the rainy days. Let it be as little as 5% of your income, but ensure that you something every month. Savings are the best indicators of financial discipline.
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