How to Repair Your Credit in 3 Easy Steps

Broked

There’s not a lot of secrets when it comes to repairing your credit, although many people would like to have you believe there is. Luckily for you, this article will explain all you need to know, as well as linked pages to really dig in – in case you decide you want to learn even more about the process to repair your credit.

If I were to break down the process of credit repair, I would give you 3 easy steps. These steps would make the process much more clear, making it easier to understand (and follow) so you can get moving quickly. Let’s discuss these steps so you can get started today.

1. Review Your Credit Report

The very first thing you’ll need to do in this process is review your credit report. This is the lifeblood of your financial status. It will give you power to make more purchases or defeat you in everything you try for when it comes to financial decisions. Heck, it can even keep you from getting a job. Bad credit can make or break you in many areas of your life, so it’s important that you understand how credit works.

Getting your credit report is easy. You have a few choices here: 1) Go to AnnualCreditReport.com to get your free (by federal law) credit reports from the 3 major credit bureaus, or 2) use a paid service to get the reports. You can even check out CreditKarma.com, CreditSesame.com or Credit.com as well. Getting your reports isn’t hard and there’s plenty of ways to get them quickly.

Once you’ve gotten your credit reports you want to scan over them to see if anything is there erroneously. There’s always the possibility that you could be a victim of identity theft, but you could also just have information that was posted by error, such as wrong addresses, phone numbers, etc. Look them over to ensure that all is OK with your reports (all 3), and highlight any items that seem to be out of place, wrong or possibly proof of a stolen identity.

If you’re not entirely sure about what you’re reading, please read this article to get an understanding of your credit report.

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2. Dispute Errors or Pay Outstanding Balances/Collections

If you feel that your reports have accounts that were posted erroneously, then you need to get them taken care of. I have an article about how you can remove negative items from your credit report that don’t belong to you, which will provide you with everything you need to know when it comes to cleaning up your report, without having to hire someone to take care of it for you. It will take no more than a few hours and ~$10 in total, for most people.

The next thing you should concentrate on is whether or not there are any negative accounts that do belong to you, that you could pay off without a hassle. Most of us have had them. It could be an old cable bill after you moved, medical bills or even small accounts that don’t belong to you, but they’re so tiny that it’s best to just pay them off and get them removed. If this is you, then follow along.

These items can be taken care of by calling the numbers on the accounts. If there’s no numbers then you can located them online and go from there. Do your best to let them understand that you are willing to pay them off (today or whenever you choose), but you need them to remove the items immediately after receiving payment. You can also try to negotiate a discount for paying the bill today if it’s a bill collector, which is usually the case. I have had to do this in the past and did so with success. I do want to stress that you make sure they understand you’re going to do the right thing, but you need for them to help you in return by removing that negative item, otherwise you’ll have to go through the process of asking the credit reporting agency (bureau) to remove it and show proof of the payment. It’s just another hassle that you probably don’t want to be involved in.

If there are any items that are over 7 years old then you want to be sure that you ask the CRA (credit reporting agency) to remove that item(s). You can do these online if you’d like, but I would suggest doing it with a personal, hand-written letter that you can send via certified mail (USPS). MOST items that are older than 7 years old shouldn’t be there anymore. I know of people who have had accounts re-aged, which you should definitely dispute.

After you’ve disputed those item(s) the CRA’s have 30 days to make a decision after receiving those letters. Keep that in mind!

3. Follow Up and More

Now that you’ve gone through the dispute process you need to track how everything goes. Within a 30 day period you should receive a reply back from each CRA that you disputed items to. These replies should give you their decision as to whether or not they removed the items in question. If they removed them, great. But what about the items that they did not remove?

Now is the time to follow up with another request or simply send a Method of Verification letter. This letter is pretty simple and gets right to the point. It simply asks them how they arrived at their decision, but it also shows them that you’re serious about this item. You should get a response back after that, but if their decision remains, then you’ll have to take it up a notch. This is where you should contact the CFPB. It’s one of the last things you’ll be able to do, but it should help if you’ve gotten this far and still haven’t gotten the CRA to remove the item(s).

Keep it Clean

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Once you’ve gotten your credit report cleaned up, be sure to keep an eye on it using one of the many credit monitoring services out there. Do your best to keep your accounts paid on-time, every time, and keep your credit card utilization under 20%.  Your credit really is the lifeblood of your financial well-being, so take it seriously from here on out.

If you feel like this information is too tough to deal with, then please be sure to find someone who can help you, whether it be a friend or family member who can help you with the steps or a professional who does this for a living. You can boost your score in a few short months if you take it serious and follow through with each step.

If you have any questions, please feel free to ask them below and I will do my best to answer them.