Your credit history or payment history makes up 35% of your credit score. That is more than any other area of your credit score, thus making it the most important. The other areas that make up your credit score include: Debt to Credit Ratio – 30%, Credit History Length – 15%, Types of Credit – 10%, and Inquires – 10%. As you can see your payment history is more important than anything else and that makes fixing it important to you and your credit future.
Your payment history is negatively affected by any negative mark put on your credit report by your creditors that you have accounts. This includes late payments, collections, charge offs, judgments, liens, repossessions, foreclosures, and bankruptcies. The more recent a negative mark is and the more you owe on it the worse it will affect your credit score. So it is imperative while fixing your credit history you don’t get any new marks that will ruin your credit any more. Make sure you can pay everything on time now then worry about your credit mistakes in the past.
The best way to fix your credit history is to remove those negative items that are hurting your credit score. Get a copy of your credit report and review all your credit accounts. The more recent accounts and the ones that are owed the most hurt you the most, but they are the hardest to get off. It is recommended to focus on one third of your negative items and go with the easiest ones first. The easiest ones are the oldest accounts and the ones that are paid off.
You will have to draft a dispute letter to each of the 3 major credit bureaus Experian, Equifax, and Transunion. The credit bureaus are obligated under the Fair Credit Reporting Act to allow any consumer the right to dispute anything on their credit reports that they believe to be inaccurate or erroneous. The credit bureaus have 30 days to verify the dispute with the original creditor or it must be removed from your credit report.
It is very important if you have a bad credit history to fix it and remove it. Too many people wait until they need a loan to start worrying about their credit, but by then it is too late. It takes several months to fix a credit history, so begin today so you won’t have any regrets.