The fact is there’s no quick fix for your credit history. You can improve your credit report, and therefore your credit worthiness legitimately, but it takes time and a conscious effort. You can repair your own credit!
So, you may be asking, “how can I do this?”
Tips that can help you repair your credit
1. Order your Credit Reports for Free
Take a look and find out what the major credit bureaus — Equifax, TransUnion and Experian — are saying about you. They all may be somewhat different or have slightly different information in them because creditors don’t have to report to all three credit bureaus, so they typically report to the credit bureau to which they also subscribe to.
If repairing credit, you will want to look at all three reports because it may be a waste of time to only look at one report. At the web site annualcreditreport.com, you can order all three of your credit reports once a year for free. Additionally, if you’ve been denied credit, insurance or employment because of your credit report, you are entitled to a free copy of your report from the reporting agency that the report came from. The company you applied to must supply the credit bureau’s name, address and telephone number. You have 60 days after receiving the denial notice to request your copy.
2. Check your Reports Carefully
People make mistakes — that is what we do. As someone at the credit bureau is entering your information mistakes are bound to happen that is why it is important to examine and verify information in your report. The credit bureaus generate your report on information they receive from your creditors; they don’t verify, so you must.
Managing your finances is a job and that job is your! Managing your credit history, your credit report information is also your job. When examining your credit report, you are looking for every type of error, form outdated or incomplete information to typographical errors. Be through and make a list of everything you want to dispute and why.
Be familiar with the types of information contained in your credit reports. Because they are coming from different companies, they will all look similar but different. Each credit report consist of four parts of information: your personal identifying information, detailed history for each of your credit accounts, public records information section such as a bankruptcy, and the inquiries section which includes inquires that have been made to your credit file.
3. Dispute and Document Your Credit for Repair
it doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report.
You can either complete the dispute form provided with your credit report or write a dispute letter to the credit reporting agency. Clearly identify each mistake and state why you believe it’s wrong. Send a photocopy of your credit report with the mistakes circled to the reporting credit bureau. Include copies of supporting documents.
When all else fails, document. Keep copies and records of all correspondence and dates sent to credit bureaus. The credit bureau has a responsibility to investigate any relevant dispute within 30 days of receiving your letter. Any item that is not verified as accurate by a creditor should be removed.
If any changes are made to your credit file, the credit reporting agency will send you the results and a free, updated copy of your credit report. Additionally, once a negative item is removed from your report, it cannot put it back on unless a creditor verifies its accuracy and completeness of the information and sends you written notice.
Remember that if the negative information in your report is true, only time and improved credit worthiness can change that. Late payments and charged-off accounts remain on your report for seven years. Bankruptcies will stay on your report for ten years. Some creditors, however, look for a pattern of payment rather than focusing on one-time or rare occurrences; so consistent on-time bill payments will improve your report.
4. Devise plan to Reduce Debt
Now devise a plan to reduce and eliminate debt. Eliminating debt starts with a budget or spending plan. On purpose, before you get paid, spend your money on paper and stick to the plan.
If you’re finding that making payments are difficult, be proactive and talk to your creditors. You may be able to negotiate reduced monthly payments or change due dates to fit your income streams. It’s very important that you keep your accounts current and from being reported as delinquent or bad debt.
This strategy can also be used to take care of fixed-loan payments as well. Keep in mind that this should only be used for a short time because you’ll pay more interest to extend payment. However, if you are having trouble making payments, it will allow you to stay current and help your credit. Use the extra money to pay off debts one at a time, gradually increasing payments to other debts.
Deal head-on with any with any collection accounts because unpaid collection accounts are worse than paid collection accounts. You can negotiate a pay-off settlement that reduces your pay off amount. Additionally, ask that all derogatory comments are removed from your credit report or at least, that the account is reported in full. Lastly, be sure to get verbal agreements in writing before sending off your payment.
If the negative information in your report is true, only time and improved habits can change that. Items such as late payments and charged-off accounts remain on your report for seven years. Bankruptcies stay on your report for ten years. Some creditors, however, look for a pattern of payment rather than focusing on one-time or rare occurrences; so consistent on-time bill payments will improve your credit file.
Gradually close unneeded or unused credit accounts. Be aware that closing accounts can negatively affect your credit score. Cutting up a card does not close the account. You have to call the creditor to close the account. Try to keep your revolving debt to 50 percent of your available credit.
5. Add stability to your credit file
You can also work to add positive information and show stability in your credit file and build a solid credit history. Start by asking your creditors to report your account information and monthly payment history to the credit reporting agencies. If you have bad credit, do not let your credit file go dormant. The faster you begin to establish a good credit history, the better. And lastly, open a savings account at a bank or credit union. This will show that you are working to save money and you have money to repay debts.
The truth is there is nothing a credit repair company can do to improve your credit that you can’t do for yourself. So, save yourself some money and the hassle of finding a reputable company and repair your credit yourself.
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This is a great article! Taking responsibility for the credit we owe is very important. Thanks for sharing the tips.
Sheila recently posted..CNA Certification
This is a great post. Some people think you can easily discharge a lot of negative credit items that are true. I’m glad you pointed out that it usually doesn’t work.
Bret @ Hope to Prosper recently posted..Money Fail: Dead End Job
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