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Is a bad credit report fixable?

January 25, 2011

I have received an inordinate number of questions about credit lately.  This is not surprising based on the economic challenges that we have seen over the past few years.  The good news is that a credit report in a snapshot.  It is a moment in time and can, therefore, be improved with a little investigation and hard work.  Two examples of common issues are accuracy and prudent use of credit.

A credit report can be fraught with inaccuracies.  Old accounts, fraud and creditor error can all conspire to hurt your credit.  Save fraud, these issues are typically easy to address with knowledge of the errors and a plan to remedy them.  A few well written letters targeted at the specific issue can solve these problems and provide an near immediate boost to your score.

Credit balances are also a major culprit of low credit scores.  Conventional wisdom dictates that a balance of no more than 30% of the available credit is the best way to maintain a positive credit score.  Sometimes high balances are difficult to fix because the genesis of the balance could be over-extending on lifestyle or hardship from loss of income.  In this case it is important to devise and execute a detailed strategy for debt reduction.  Although the benefit takes a bit longer to realize, the long-term improvement to your overall financial health goes beyond buying a home.

In the end, credit repair is about knowledge and the will to improve.  It is about being committed to identifying the root cause or causes and dealing with them in an organized and discliplined approach.  Too often, fear, laziness or lack of awareness acts as an albatross around one’s neck and the credit problems move to the bottom of the to-do list.  So to the question “Is a bad credit report fixable?” I would ask what you are willing to do to fix it.

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