These days, more than ever, consumers are worried about their credit history and seeking credit help. It’s no wonder with up to 70% of credit reports containing very serious errors.
A bad credit history doesn't have to be a life sentence. If you educate yourself in how the credit reporting system works, you can work to remove issues caused by a divorce, bankruptcy, collection account or judgment. Bad or good credit has one thing in common. It must be verifiable. Fortunately for us, credit inaccuracies can be removed.
DIY credit repair is possible if you follow these 5 simple steps:
1. Get a complete copy of your credit report.
There are three national credit bureaus: Experian, Equifax and TransUnion. You can get a completely free copy of your credit report once per year from www.annualcreditreport.com. Once you have your credit reports, go over each one with a fine tooth comb. Scour the reports for errors such as inaccurate account information, incorrect home addresses, duplicate accounts and false information. Many times you will find small errors like credit limit, balance, date opened/closed and payment history and fixing those errors can make a huge difference on how your credit looks.
2. Dispute the errors.
Once you determine the errors, highlight each one and attach a credit repair letter and a copy of the credit report explaining the nature of your dispute. Send off the letter and a copy of the report to the corresponding credit bureau. Wait about 30 days to get a response from the credit bureau reflecting the correction and continue this process until you have cleaned up all inaccurate, false or outdated or unverifiable information. Credit bureaus can only report a negative credit history for 7 years from first serious delinquency or charge off so be careful to look for outdated information.
Equifax
(equifax.com)
PO Box 740241
Atlanta, GA 30374-0241
(800) 685-1111
TransUnion
(transunion.com)
760 W. Sproul Rd.
Springfield, PA 19064-0390
(800) 888-4213
Experian
(experian.com)
PO Box 2104
Allen, TX 75013-0949
(888) 397-3742
Keep a paper trail of everything! Your proof of all your hard work will be in your documentation so be sure to keep copies of everything. Send your credit repair disputes by certified mail so that you get a receipt back showing the dispute was delivered to the credit bureau. Credit bureaus receive millions of pieces of mail so don't think your dispute won't get lost in the shuffle. You may need all that documentation later if you find the bureau being resistant.
3. Go directly to the source
Sometimes you may find that the credit bureau has determined your information to be timely and accurate. You may feel differently about it and may even have a good argument. That is when it is time to turn your attention to the creditor who is reporting it. The creditor holds all the power in how they report your accounts and ultimately they are the one who can remove a negative mark.
Some strategies to dealing with the creditor is to provide them with a written history of what you believe happened. Maybe they charged a late fee inappropriately or maybe they agreed to re-age a late payment but did not follow through or possibly you had an agreement with them to remove a negative mark in exchange for settling a debt. Follow the same strategy as above getting everything in writing and keeping good records of exactly who you spoke to and where you mailed your credit repair letters.
4. Validate the remaining debt
Use your rights under the Fair Debt Collection Practices Act to question the validity of the debt. If they cannot prove it- they cannot collect or report it- simple as that! Do not forget to check the Statute of Limitations - you may not even have to pay it.
5. Negotiate the debts that you owe
Once you have completed all the steps above you will probably be left with a few accounts that you do need to pay off such as outstanding credit card debt and collections that you legitimately owe. By dealing with the collection agency in writing you can begin to negotiate a reduced payoff in exchange for a better rating or a deletion of the negative account. This can be very effective in wiping out negative credit. A collection agency is more interested in getting your money than reporting the debt. They only report it as a tool to get you to contact them because they know eventually that bad mark will be in your way of getting a car, home loan or job.
As always, Keep Everything! Get everything in writing especially settlement offers. If you don't they may cash your check and leave the nasty mark on your credit. Move onto someone else within the agency if the person you are dealing with is impossible. Ask for a superior. Never let the debt collector know that you are paying off the bill because you are trying to get a loan. They will have you right where they want you if you do.
