I need to fix my credit, how do I get started?
It can be a little gut wrenching to apply for a loan or other line of credit. Suddenly you wonder if anything you don’t know about is lurking on your credit report. Worse, if you get turned down because you need to fix your credit, than you need to get started on the path to a better credit score by learning the basics of self credit repair.
We recommend you work at repairing your credit score on your own. Avoid all the credit repair schemes that my find their way to your mailbox or that you come across. If you do choose to have a third party assist you with your credit repair, be sure to use a legitimate service such as Lexington Law
Start by getting a copy of your credit report and review it to check for errors and to identify the negative information that is affecting your credit score. According to the U.S. Public Interest Research Group, one in four credit reports contain impactful errors.
Look for inaccurate information such as late payments that were in fact paid on time, credit limits on lines of credit that are showing lower than they actually are. (this will affect your utilization rate and could also cause the credit bureaus to think that you have exceeded your credit limits)
You’ll also want to review each account and make sure that you have not been the victim of identity theft. An account that was fraudulently opened in your name could drastically reduce your credit score, and unless detected quickly can cause you a tremendous amount of trouble to remove the account and the associated charges and activity from your credit report.
I see negative information, what next?
Analyze each account that has erroneous information and make a list or create a spreadsheet to track your credit repair efforts for each account.
Pay attention to exactly which bureau on your credit report has record of the negative information. You’ll want to have a report that includes information from all three bureaus to facilitate that level of detailed scrutiny.
Start with accounts that have the most recent errors as more recent information has the biggest effect on your credit score. Select three accounts and write a dispute letter for each bureau that is displaying the erroneous negative report for that account.
Why is a letter necessary to fix my credit, can’t I just call?
The Fair Credit Reporting Act requires that credit bureaus and creditors respond to you written correspondence in a timely manner (usually 30 days). While a phone call can be helpful to answer questions or even initiate a dispute, a formal letter, with copies of statements or other forms of documentation sent via certified mail is the best way to ensure that your dispute is handled in a timely manner and that you have provided all backup documents to support your dispute. Be sure to clearly indicate the piece of information you are disputing, your name and social security number, and the reason you believe the information is erroneous and copies (not originals) of your supporting documentation.
How long does it take to see the changes to my credit?
The credit bureaus are required to investigate your claim and request information with your creditor associated with your account. If your lender does not respond or provide proof that the disputed negative report is legitimate, the bureaus are required to promptly remove the incidence from your credit report. While you will likely see a response from the credit bureau within 30-days from receipt of your dispute letter, it may take 60 days or more for the errors to be changed on your report. Once each erroneous item is removed you should see your credit score improve.
Good Credit Sense:
In addition to removing erroneous negative information from your report you’ll need to make sure you have several accounts in good standing and which are showing on time payments each month. If you need to open a new credit account for this purpose, you can investigate pre approved credit cards that are secured and designed for consumers needing to rebuild or repair their credit.