How To Use a Credit Report to Repair Your Credit

In these trying times of global recession, many people have found it important to manage their personal finances more effectively. If the recession has taught us anything, it is that dependence on credit and lending facilities may not be the best option to take when managing your personal finances. People are more guarded against personal spending these days, and while the world tightens its belt, we may find ourselves coming back to our credit situation and how we can try to repair what remains of a potentially bad financial situation.

That being said, there are a number of things that you must consider when you analyze your credit report, mainly with the intent to repair your bad credit record. There are quite a number of competent financial advisers out there who can offer professional advice on what to do with your personal finances, especially when it comes to repairing your bad credit. While some people may at first be apprehensive towards the thought of having someone come in and tell them what they've been doing wrong with their money, more and more people are starting to come around to accept the idea that, in the midst of a recession, we need all the help we can get.

Many banks, financial institutions and online financial services now offer free annual credit reports for people, and this is something that you should take advantage of. Your annual credit report will serve as a barometer for how well you are doing financially, so it would be a good idea to check on this once in a while. Apart from your personal health, you should also learn to treat your finances as a vital part of your body, so think of the annual credit reports as an annual physical exam for your finances. You should learn to check your annual credit report often, especially when you are preparing to make a large investment
based on credit, such as buying a home or a car. You should also check your credit report if you suspect your identity has been stolen, as cases of this type of identity theft continue to rise. If you have been denied a certain credit-based service, such as applying for another credit card, you may want to check on your credit report as well.

In order to repair bad credit, you must be able to analyze your credit report for errors. First, look for any type of clerical errors in your credit report. Bear in mind that this is far from an exact science, and there is always room for human error. The easiest mistakes to spot and dispute are clerical or computation errors that may have been made while generating your credit report. You must also be able to check the veracity of the payment history on your credit, as some of your previous payments may not have been reflected, thus resulting in a bad credit report. Check also for unpaid judgments, high balances or student loan defaults.