It's important for consumers in the United States to have a good credit rating. Unfortunately, there are millions who learn this lesson too late. They usually start thinking about "how to repair credit" on their way back from the bank after they've been denied for a car loan or mortgage. Sometimes it's on the way back from an apartment complex after trying to finding out their rental application has been denied. Either way, it can be very frustrating and it can stop you from living the life you want to live.
The good news is that no matter how bad your situation is, there are many ways to repair your credit. To repair credit, you must find a starting point. The best way to do that by grabbing a copy of your credit reports from the 3 major consumer reporting agencies – Equifax, Experian and TransUnion. You will also want to know exactly what your credit scores are.
Once you have your reports, you'll want to make sure all the information is accurate. More than 75% of all credit reports have erroneous information in them. Look for any negative accounts on your credit report that might be inaccurate. Highlight them and include them in a dispute letter to the consumer reporting agency that is reporting them. If you are unsure of whether an account is inaccurate or not, or if there is any question in your mind that it does not belong there, request an investigation. Whether the account is actually yours or not makes no difference. If it can not be 100% verified – it must be deleted.
Give the CRAs time to conduct their investigation – 30 to 40 days is sufficient. Once you receive the results of the investigation, check to see which negative items have been removed. If items have been verified, you can send them a procedural request to request the exact methods that they used to verify the information. You will want to keep using this process until you have achieved the desired results.
Another thing you should do is pay off any balances that you are past due on. This only pertains to accounts that are less than 180 days and have not been charged yet. Do not make payments to accounts that have been charged off as paying them can bring your scores down even further because it makes the negative account current.
For older accounts that you were not able to get removed by disputing, you may want to send the credit a pay for delete letter. A pay for delete letter is simply a request to delete the item from your credit report in exchange for payment in full. Always send the request in writing and obtain their agreement in writing before sending payment.
Learning how to repair credit is a must for anyone who has been less than responsible with their credit in the past. Your credit rating is an essential component of your financial well-being and something that you should always be willing to fight for.