There are plenty of professionals who would jump at the chance to help repair your credit after a financial rough patch. However, you can actually save money by repairing your own credit, as long as you have a little perseverance and follow these simple steps.
Once you have recovered from your financial troubles, there is one final, important part of the process: credit repair. It probably seems like an impossible task to repair your own credit, but it is often safer and less expensive than using a professional. Many credit repair professionals make false promises they cannot possibly keep, and will ultimately be a waste of your time and money. Instead, use the steps listed below to take your credit into your own hands.
Step 1: Get a Free Credit Report
- Entitled to one free credit report annually
- Need to see what you are trying to repair
The first step in the process of repairing your own credit is of course, seeing what you need to repair. There are three major credit reporting agencies in the United States. Everyone is entitled to one free score from each agency every year. Check out annualcreditreport.com to get your free credit score today. According to the Federal Trade Commission (FTC) there are also a few other circumstances which may entitle you to additional free credit reports. These situations include:
- If you are denied a credit card, a loan, any kind of insurance, or a job based on your credit score. In this case you must request a score within sixty days.
- If you are offered unfavorable rates on loans, you also have sixty days to request a free score.
- If you are currently not working, and intend to begin a job search in the next sixty days.
- If you are a recipient to welfare benefits.
- If you are a victim of identity theft, or any kind of fraud that could affect your credit profile.
If any of these situations apply to you, request a free score immediately. Additionally, certain credit card companies, such as Discovercard and USAA, are beginning to provide their clients with a free credit score with their monthly statement.
So what should you do now that you have your free score in hand? In order to begin repairing your own credit, you need to see what pars of your credit profile need fixing. Scrutinize your profile with a fine tooth comb. Look at any negative aspects closely and make sure they are accurate. Also check that negatives on your report are no more than seven to ten years old. By this point, they should have dropped off of your report and no longer affect your credit score.
2. Fix Any Inaccuracies
– Important to fix any and all inaccuracies
– Must file formal complaint
Now that you have gone over your credit report thoroughly, the next key step in repairing your own credit is fixing any errors you found on your report. There are two ways to file an error claim, either by mail or online. To file a report online you can use this website, or file on any one of the other major credit reporting companies. Once you file a claim with one agency, they will take care of reporting the others. To file a report by mail, you must send the agency your name, address, the error(s), any evidence you have of the errors, and a formal request to resolve the issue. Make sure when you are sending documentation of the errors, only send copies. You should keep all the originals. Also, be sure to clearly mark the errors and any pertinent information on the copies. The agency is required to investigate your claim within thirty days of receiving it, and inform you of the decision. If the decision is not in your favor, you are entitled to ask that a note of your argument is added to your report. After fixing the inaccuracies on your report, you are well on your way to repairing your own credit.
3. Goodwill Adjustments
– Request removal of negative aspects on credit report
What happens if you have looked over your credit report, and you have only accurate negatives? Don’t lose hope. Every negative will drop off in time, up to ten years, there is a way to remove these even sooner. Try writing to your creditors and politely request that they remove the information immediately. If they agree, and remove the information, it is known as a “goodwill adjustment”. When requesting a goodwill adjustment, keep in mind that creditors are not required to remove accurate information, and are free to deny your request. Still, any effort to repair your own credit is worth a try. Check out this video that includes even more tips to repair your own credit.