How To Repair Your Credit
Follow these steps in order to handle repairing your credit report yourself. However, if you would prefer to leave this job to the experts, go to www.ideservebettercredit.com now to consider this service.
Where to Start
If your home loan is past due, other obligations probably are too. A nonprofit credit counseling agency can help you work with creditors to reduce monthly payments by lowering interest rates or extending repayment periods. The National Foundation for Credit Counseling is a good place to start.
Order Your Credit Report For Free
You can request your credit report from www.annualcreditreport.com, or by calling 1-877-322-8228. If you would also like to receive your credit score, you have to pay a fee. By law you are entitled to one free credit report from each agency once per year, you can either request all three at once, or at separate times throughout the year.
Look over your credit report and highlight any items you do not recognize, or errors you may find. Sometime you will find some information that is just plain wrong. Accounts that are not yours, judgments against people with similar names and duplicate items are very common. Some items are more subtle, an example would be debt that is listed as unpaid when it was discharged in bankruptcy. Ask the credit bureau in writing to re-investigate the information. Under federal law, the bureau must reinvestigate and report back within 30 days. If the bureau does not report back within 30 days, the item must be removed.
How Do You Get Information Removed From Your Credit Report?
Contact the credit reporting agency and inform them of any errors. Disputes can be filed online at www.experian.com, www.transunion.com, and www.equifax.com, by mail, or by phone. Addresses and phone numbers for the agencies will be listed on the credit report itself. Contact the company in question and ask them to research the discrepancy. Keep in mind that you will most likely have to provide evidence supporting your dispute, such as canceled checks or receipts. Always send copies, never the originals, and, send all correspondence certified mail, with a return receipt.
Once the creditor concludes an error has been made, request that they send a written correction to all three credit bureaus, and provide a copy to you. If a creditor does not respond within 30 days, or cannot verify what they are reporting is accurate, the credit bureaus are bound by law to remove the negative listing from your credit report.
If you do not get results within the time period specified by state law or the F.C.R.A., you can write a letter threatening to sue under state or federal law. You can also try to contact the creditor directly. Keep in mind that a creditor may also be liable for reporting wrong information. Before jumping into court, try contacting your regional Federal Trade Commission office and your state Attorney General's Consumer Fraud Department.
How Do You Get Negative Items Removed From Your Credit Report?
If you have "bad" items, such as late payments, charge-offs, judgments and or a bankruptcy, the credit bureaus can legally report this information. However, if the information is stated in an incorrect or misleading format, it is possible to ask the bureaus to reinvestigate the information. Sometimes you will get lucky and the bureau does not report back within 30 days. In this event, the information must be removed.
Do not be too specific with your request. For example, if a bureau reports that you had a judgment against you and it was paid, do not volunteer that information (a judgment rendered and paid is still worse than no judgment at all). Simply state that the information is incomplete and request that it be re-investigated. In some cases, it is less work for the credit bureau to remove the item than to re-check it.
Make Your Credit a Priority
Good credit can literally save you thousands of dollars a year. So, make sure to pay your bills on time. Late payments (more than 30 days) have a negative effect on your credit score.
Reduce the number of cards you carry. You want no more than 3 or 4 credit cards open at one time. Write to the credit card companies requesting that they close your account, and report the status change to the credit bureaus. Keep in mind that length of credit history is also an important factor so consider keeping cards open that you have had for a long period of time.
Write to the credit card companies and ask them to reduce your credit limits on your credit cards. The total amount of credit available to you is one consideration made when computing your credit score, even if you owe nothing. Split what your normally would pay into two or three payments. A good way to increase your credit score is to pay your credit card bills more than once a month. Not only will you save money on interest, but you could really boost your credit score. Many credit card companies will take payments online, over the phone, and by mail, which gives you many options.
Avoid bankruptcies, and tax liens. They greatly reduce your credit score, and remain on your credit report for up to 10 years. Unpaid tax liens could haunt you forever. Debt consolidation companies are also reported on your credit report and some home lenders look at it the same as a bankruptcy. You can call credit companies yourself and reach payment terms. Calling yourself will save you money in fees from the credit counseling service, and you will not have that mark on your credit report.
Sample Dispute Letter
Your City, State, Zip Code
Name of Company
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.
This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.
Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Enclosures: (List what you are enclosing)