5 Easy Steps To Effective Credit Clean Up

Have your old bills and other credit issues followed you like a lost puppy into the New Year?  If so, it’s time for you to take charge of your financial life and resolve to take the steps today that will improve your chances of getting the refinance loan you might need tomorrow.  Here’s a simple step by step plan that will have you singing credit clean up before spring.

Assess the Damage – Get a copy of your credit report and see what it has to say.  Most Canadians are shocked to learn what’s on their credit report – and what’s missing.  The only thing a potential lender has to judge your ability to repay a loan is your credit report, so if it’s not accurate it will be impossible for a lender to make a reasonable assessment of your ability to repay a loan.  Credit clean up tip # 1: Assess the damage.

Make a List – If you see inaccuracies on your credit report such as accounts that aren’t yours or payments being reported as having been paid late that were actually paid on time, make a note of them.  In addition, check to see that your personal information and your work history are accurate. Credit clean up tip #2: Make a list.

Contest Inaccuracies – Any accounts that are improperly credited to you should be reported immediately to the credit reporting agency and contested.  Be sure to contest any appearance of an account on your credit report that isn’t yours, even if it’s currently being paid on-time.  While you may think that someone is accidentally doing you a favor – don’t.  It could be fraud and the perpetrator of the fraud will eventually quit paying the account.  When they do, who do you think they’ll come looking for?  Credit clean up tip #3: Contest inaccuracies.

Pay Your Own Way – Legitimate accounts should be paid off immediately.  If the balance is too high to pay all at once, make payments.  By making a good faith effort to pay your legitimate debts you will be getting yourself closer to your goal of paying off a debt that will have a ositive impact on your credit score.
Follow-up  – Once a decision has been made about any inaccuracies found on your credit report, get another copy of your credit report to ensure that items to be corrected or removed actually get the treatment you’ve been promised.

Shop Early for a Refinance Loan – Once your credit report has been fixed, begin shopping for a refinance loan.  If you’re contacting numerous lenders about what their rates are, delay giving them your social security number until you know for sure you want to apply for the loan.  A potential lender can make an assessment of your financial situation if they know some basic financial information – including your debt to income ratio and your credit score.  Too much information floating around can have a negative impact on your credit rating, especially if multiple lenders pull your credit report all at once.  Credit clean up tip #6: Shop early for a refinance loan.

By following these steps you can ensure that the refinance loan you get is the one you deserve.  Rates are good right now, but many lenders are tightening their lending requirements.  This means that it’s more important than ever before that your credit report bear a striking similarity to your actual credit history.  The future of your refinance loan may depend on just how well you do your credit clean up!

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