Repairing Your Credit
So, save yourself some money and the hassle of finding a reputable company
, and repair your standing yourself. Before you can start repairing your credit, you have to know what you need to repair.
Your report will contain all the information you need to start repairing your score. You are entitled to free reports from each of the three bureaus each year.
You can also order them directly from the credit bureaus for a fee. Some people don't think it necessary to pay for all three, but it is really the best option.
Some of your creditors and lenders might notify only to one of the bureaus. And, since credit bureaus don't typically share information, it is possible to have different information on each of your reports.
Ordering all three will give you a complete view of your monetary history. Make an extra copy of each report in case you need to dispute information.
Read through them once you get them and make sure that every transaction documented on them is actually from you. Become familiar with the information contained in each.
Using different color highlighters or pens, highlight what you need to repair: Incorrect information, including accounts that aren't yours or payments that have been incorrectly reported late, should be corrected so you do not get penalized. Maxed out accounts that are over the limit and past due accounts that are late, charged off, or have been sent to collections should be double checked as well.
You have the right to dispute any information in your report that isn't correct. When you ordered your reports, they should have come with instructions for disputing information.
If not, you can send a letter to the credit bureau detailing the inaccurate information. It is often helpful to send a copy of the report with incorrect information highlighted.
Since payment history makes up such a large part of your score, several past due accounts have a significantly negative effect on your score. Taking care of these is crucial to improving your score.
Your goal is to have all your past due accounts being recorded as "current" or "paid." Get current on accounts that are past due, but not yet charged-off.
Do what you can to keep accounts from getting charged off and pay off charge-offs. You should also work with debt collectors to take care of your collection accounts.
Your money utilization is your total debt compared to total credit. This number makes up 30 percent of your score.
Having maxed out cards costs you score points; not to mention costly over-the-limit fees. Bring maxed out cards below the limit, then continue working to pay the balances off completely.
After you have resolved the negative items on your report, work on getting positive information added. If you have some cards and loans being recorded on time, good.
Continue to keep those balances at a reasonable level and make your payments on time. Some establishments don't file claims to the bureaus if you are a faithful payer.
Contact these businesses and request that they begin letting the bureaus know of your good paying habits. This may require that you bring in your own paperwork for them.
On the other hand, you might have to reestablish your credit by opening up a new account. Since past delinquencies can keep you from getting approved for a major credit card, only make one application.
This will keep your inquiries low. If you get denied, try applying for a department store credit card or getting a secured card.
Salvage what you can and don't sacrifice accounts that are in good standing for accounts that are not. Continue making timely payments on all your current accounts.
Get consumer counseling. If your debts are overwhelming, creditors aren't willing to work with you, and you can't seem to come up with a payment plan on your own, consumer credit counseling is an option for getting back on track.
by: Terry Daniels
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