Credit Repair â Where Do I Begin?

First of all, take a few deep breathes. OK, now letâ s get started. Forget about everything youâ ve heard about credit repair; the scam stories, the â it doesnâ t workâ stories...get all of that out of your mind, because it absolutely works and itâ s not that difficult at all. Have you ever noticed that the people telling you that credit repair doesnâ t work usually have pretty bad credit themselves and havenâ t had good credit in a long time? Just something to think about.

Credit Reports

You know you have bad credit, because you canâ t get approved for any loans that you apply for, but thatâ s not good enough. We need to know exactly how bad it is, so letâ s get a copy of our credit reports. As you probably already know, there are 3 major consumer reporting agencies (credit bureaus), Equifax, Trans Union and Experian. You will need to get a report from all 3 of them. The best way to do that is to get them separately from each credit bureau. You can do that over the phone or by mail. You can also get your reports through a credit monitoring service.

You can also go to AnnualCreditReport.com and order your reports for free from there, but if you do that you give the credit bureaus an extra 15 days on your investigations. You donâ t want to do that. Pay for your reports.

Dispute Negative Items

Under the Fair Credit Reporting Act, you have the right to dispute any information contained on your credit report. This is simply done by writing the credit bureaus a dispute letter. Once they receive your letter, they are required to verify the information with the furnisher. They have 30 days by law to do so. If the information cannot be verified, it must be deleted.

Many people will tell you that if the account is "really" yours, you canâ t dispute it. However, if you read the FCRA, it doesnâ t say anything about that. Whether or not the account is "really" yours has no bearing on the credit bureaus responsibility to verify it. If it canâ t be verified, it must be removed from your report. If the creditor canâ t provide verification of your account, they canâ t legally report it on your credit reports. Itâ s that simple.

Build Positive Credit

After you've cleaned up your credit report, the key to rebuilding credit is to get positive information reporting. Acquiring new positive accounts is just as important as deleting negative information. One of the best ways to do that is by getting a secured credit card. The interest rates are usually pretty high and the credit limits pretty low, but thatâ s OK because you are strictly using these cards to build credit. Keep your balances at about 30% of your credit limits.

The most important part of the credit repair process is learning from your mistakes and realizing where you went wrong. Learn to live below your means and budget your money so that you donâ t have to go through it again.

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