Fix my credit report

[Gloria]

I’m getting back on my feet and looking for advice on how to fix my credit report. I really need to raise my credit score. Tnx…

[Tracy Winters]

You don’t Fix bad Credit. You re-establish good credit

You need to understand how credit rating systems work. Your credit report contains your credit history and your current credit standing. Your credit score is the output of a complex algorithm (Fico) that runs on your credit report.

Two major things affect the output of this algorithm (i.e. your Fico score):

1. Positive information such as stream of timely payments, low credit utilization, credit diversity and age of credit file increase your credit score.
2. Negative information such as late payments, charge offs, defaults, liens etc lowers your credit score.

According to the FACT Act, credit reporting agencies are allowed to include information (both positive & negative) in your file, on the condition that it is correct and accurate.

With that being said – you understand that there is no legal way to remove negative information from your file. This means that accurate negative information will continue to lower your credit report, and you cannot undo it.

The ONLY thing that you can do to improve your Fico score is by increasing the amount of positive information on your file (i.e. re-establishing good credit). Re establishing good credit is pretty much the same as Building Credit History.
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Luckily, 90% of your Fico score is determined by the previous 2 years activity. This means that although derogatory information remain on your file for 7-1/2 years, its impact on your Fico score will decrease, while the stream of positive information raise your score as time goes by.

Another important thing to remember is that Fico score is not everything. When making lending decision creditors look at your actual credit report. Although paying your debts will not raise your score, potential creditors will have a more favorable attitude toward late-but-paid debts than to unpaid debts.

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