Fix Credit Errors Before You’re Denied for Credit

Consumers decide to fix credit problems after they’ve been denied for a line of credit or a loan. As many of you may already know it is tremendously embarrassing to have someone say, “I’m sorry, but you were denied.” What is even worse is that you probably applied because you were in need of that car or that home loan. However, there are steps you can take to avoid the humiliation of being denied and the feeling of helplessness that ensues when you can’t get a loan.

Get Your Credit Reports
The credit bureaus will provide you with free reports every 12 month period. Make sure to get the reports six months to a year before you plan on applying for a big ticket item or any line of credit. You want to make sure that you’re giving yourself enough time to fix errors and maximize your scores before you even apply.

Verify the Reports
A report done by the U.S. Public Interest Research Group stated that “79% of the credit reports surveyed contained either serious errors or other mistakes of some kind.” That would indicate that almost 4 in 5 Americans have something on their reports that needs to be verified. Make sure that if you are one of those people that you have the credit bureaus validate any questionable information. A good credit repair company can help here.

Pay Off Debts
Banks are more likely to lend you money if they see that you’ve actually paid off all of your past debts. If you do have outstanding debts with creditors or collection agencies, try to negotiate a lower payment and then pay them off. No one is going to give you a loan if you’re already thousands of dollars in debt.

Pay Down Credit Card Balances
If your cards are maxed out, pay those balances down. If a lender sees that all of your revolving accounts are at the limit, they will immediately think that you are incapable of handling credit responsibly. You want to be somewhere near 20% of your total available credit limit.

Give Yourself Time
Credit repair is not a process that happens over the course of a few days. It is done largely via the mail, with over 30 day response times. It can be time consuming, and as such, you should realize that if you want your credit score to be as high possible before applying for loans or credit cards, that you’re going to be fixing your credit from anywhere from three months to over a year. If you get a head-start on it though, you may never have to hear a denial again. That alone makes the hassle well worth it.