Categorized | Credit

How to Repair Your Credit

How to Repair Your Credit

How to Repair Your Credit

1. Introduction to Credit Repair

Living with bad credit in America today is possible, but it’s tough. Bad credit makes many things difficult, impossible, or more expensive. For example, did you know insurance companies often charge a higher interest rate for drivers that have bad credit scores? If you’re getting new utilities turned on in your name, the company will check your credit to decide whether you should pay a security deposit. We all know that banks check credit scores before they give you a credit card or a loan. As years go by, the list of companies who check your credit will probably grow instead of shrink.

Why Pursue Credit Repair?
Credit repair is critical to saving money on insurance, loans, and credit cards, but that’s not the only reason to repair your credit. A better credit score opens up new employment opportunities, even promotions and raises with your current employer. If you dreams of starting your own business or just want the security of knowing you can borrow money when you want to, you should repair your credit sooner rather than later.

Do It Yourself Credit Repair
You’ve probably seen advertisements for credit repair on television or heard them on the radio. I’ve even seen credit repair signs on the side of the road. You don’t have to hire a professional to fix your credit. The truth is, there is nothing a credit repair company can do to improve your credit that you can’t do for yourself. Save some money and the hassle of finding a reputable company and repair your credit yourself. The next steps will show you how.

2. Get the Latest Copies of Your Credit Reports
Before you can start repairing your credit, you have to know what you need to repair. Your credit report contains all the mistakes you’ve made that have led to bad credit. Read through your credit report to see what are the negative items affecting your credit score. By law, you’re entitled to free credit reports from each of the three credit bureaus each year. This yearly free credit report is available only through AnnualCreditReport.com. You can also order by phone or mail if you need to.

Other Ways to Get a Free Credit Report
You’re also entitled to a free credit report if you’ve been turned down for credit because of something on your credit report, if you’re currently receiving government assistance, if you’re unemployed and planning to look for a job soon, or if you think you’ve been a victim of credit card fraud or identity theft. Some states even have laws that let you get an additional free credit report each year. All these free credit reports should be ordered directly through the credit bureaus.

Paying for Your Credit Report
If you’ve already used up your free credit reports for this year, you can order your credit reports directly from the credit bureaus for a fee. The bureaus all offer a three-in-one credit report that lists all three of your credit reports side-by-side. The three-in-one credit report costs more than a single credit report, but less than the combined price of purchasing your individual credit reports.

Why Order All Three Credit Reports?
Some of your creditors and lenders might report only to one of the credit bureaus. And, since credit bureaus don’t typically share information, it’s possible to have different information on each of your reports. Ordering all three reports will give you a complete view of your credit history and let you repair your credit at all three bureaus instead of just one.

It’s a good idea to make an extra copy of each report in case you need to dispute information. You can send the copy of your report to the credit bureau and keep a copy for yourself.

3. Review Your Credit Reports for Errors
Once you have your credit reports, read through them completely. If you have a long credit history, your credit reports might be several pages long. Try not to get overwhelmed by all the information you’re reading. It’s a lot to digest, especially if you’re checking your credit report for the first time. Take your time and review your credit report over several days if you need to.

Reading Your Credit Report
Become familiar with the information contained in each of your credit reports. They’ll all look very similar, even if you’ve ordered them from different bureaus. Each credit report contains: your personal identifying information, detailed history for each of your accounts, any items that have been listed in public record like a bankruptcy, and the inquiries that have been made to your credit report.

Deciding What Needs Repair
Here are the types of information you’ll need to repair:

Incorrect information, including accounts that aren’t yours, payments that have been incorrectly reported late, etc.
Past due accounts that are late, charged off, or have been sent to collections.
Maxed out accounts that are over the credit limit.
Use different color highlighters for each type of information to help you easily make a credit repair plan. You’ll take a different approach for incorrect information than you would for a past due account so using different colors save time re-reading your credit report each time you’re ready to payment a payment, call a creditor, or send a letter.

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