Having bad credit will not only rob you of the finer things of life, but it will also cost you money, happiness and security. Therefore, regardless of how severe your credit problems are, you should seek to repair your credit as soon as possible and get back on the road to a better way of living. Following are some tips for how to repair your credit.
Acquire Your Credit Reports
The first step is to obtain copies of your credit reports from the top credit bureaus which are Equifax and TransUnion and Experian. You are allowed to obtain one free credit report every twelve months from each credit scoring company and each one will be slightly different, therefore you will need to request a copy from both companies.
Carefully Examine Your Reports
Credit report errors are quite common so it is essential to examine your reports thoroughly. Credit bureaus simply post information which is provided to them by your creditors without verifying any information.
If you find any inconsistencies whatsoever, make a note of them. Even if you only have a doubt about the charge, it should be noted for the verification process as many of these items can be removed.
Dispute Errors
Once you’ve listed all recognizable errors on your credit reports, send a Letter of Dispute to each respective bureau. The bureaus will, in turn, notify each associated creditor and request information to validate the charges. Any charges which cannot be validated within a 30 day period must be eliminated from your credit report.
Keep in mind that it is not a good idea to send a large number of disputed charges at one time. If you have many charges to dispute, break them into groups and submit separately in a timely manner. You should also verify that the disputed charges have been dropped from your credit report.
Also, avoid submitting disputes via the internet. Make all correspondence with the credit bureaus in writing via regular post, or through fax if requested. The reason for this is so that you can maintain a paper trail in case conflicts arise.
Reduce Remaining Debt
Once you have cleaned up your credit report the best you can, create a personal payment plan and pay off any other remaining debts. If you still find yourself too deep in debt to accomplish this, contact creditors and negotiate reduced debt amounts in return for larger or more frequent payments.
If you have a lot of credit cards, close them out as you pay each one off. Having too many credit cards with available credit can be detrimental to your credit rating. Then, once you get payments under control, keep your debt to a minimum and make timely payments of more than the minimum amount due.
Following these steps will raise your credit score significantly over a period of time.