How do I get a Clear Credit Rating?

Having a clear credit rating can have a positive influence on many aspects of your life. For example, a clear credit rating can make it easier to buy a house or a car; rent an apartment; or secure a personal loan. In fact, you may even need a good credit rating to land certain types of jobs. There are a few ways you can work to get a clear credit rating. They include waiting out adverse entries, paying past-due bills, having credit report errors fixed, and establishing good bill paying habits going forward.

As you begin to work toward a clear credit rating, it’s important to understand that your past credit history can follow you for quite some time. Even if you are able to pay off seriously delinquent bills, the delinquency may remain on your credit report for seven years. Bankruptcies and court judgments can haunt you for up to 10 years. This may sound like a financial sentence, but as the years pass and you establish a better payment history, your credit score may get better with time. Furthermore, when those adverse marks become outdated, your credit rating may improve dramatically.

An important step in getting a clear credit rating is contacting the major credit bureaus in your area and requesting copies of your credit report. Once you’ve received these copies, you’ll need to review them carefully for errors. If you find errors on your credit report, you can dispute them with the credit bureau in question. The company that provided the adverse information is usually given a reasonable amount of time to verify that the information is correct. If it does not, the error may be removed from your credit report.

If you’ve fallen behind on your bills, chances are that your credit report will have delinquencies listed on it. Catching up on your past-due bills can ensure that you’ll be able to keep your credit accounts open and may also prevent charge-offs. A charge-off basically means that the creditor has declared the debt you owe as a loss. Being 30 to 60 days late is a hit to your credit report, but a charge-off is usually viewed as much worse.

Keep in mind that you can negotiate to have negative information removed from your credit report. You may do well to call your creditors and negotiate payment for the money you owe, asking them to remove the negative information and replace it with “paid as agreed.” You can also negotiate with collection agencies to remove their listings from your report altogether in exchange for repayment of the debt. This can be an important step, as collection agency listings never look good, even if you have repaid your debt. If you are able to negotiate a deal, it is wise to get the terms in writing before you pay anything.

One of the most important ways to get a better credit rating involves the present rather than the past. Going forward, it’s critical that you pay your bills on time to avoid creating any new adverse reports. With time, this should help improve your credit rating as well.