Fix Your Credit Yourself
How to Repair Your Own Credit
It’s a fact of life: Your credit is extremely important to your financial well being. Good credit can open doors to better loan terms and interest rates, lower finance charges on credit cards, better car insurance rates, easier approval for renting an apartment or house — and more. If you don’t have good credit, you need to learn how to fix your credit score — now.
One way to clean up your credit is by using a credit repair company — despite the fact that many of these operations are scams, there are some legitimate ones out there. But it can be very expensive to take that route. Instead, try repairing your own credit.
You’re probably wondering how you repair your own credit. It’s not difficult — and you’ll save a lot of money by fixing your credit yourself. Keep reading to discover the steps you need to take to repair your credit and get on the road to financial freedom.
How to Fix Your Credit Score
There are a few of ways your credit score can plunge. One is because the reporting agencies made a mistake on your credit report, another is because you were the victim of identity theft and another is because you haven’t used credit responsibly. It’s time to learn how to fix your credit score. Take these five steps to fix your credit yourself:
1. Know Your Credit Score
By law, you are entitled to one annual, free credit report from each of the three major credit reporting bureaus: Experian, TransUnion and Equifax. To get your report from each bureau, visit AnnualCreditReport.com or call 1-877-322-8228.
2. Dispute Any Errors You Find
To clean up bad credit, it’s crucial you review your credit report carefully. If you do find a mistake on it, dispute it immediately.
3. Pay All Your Bills on Time, Every Time
It’s simple — if you want to fix your credit yourself you must pay your bills on time, no exceptions. The most important component of your credit score is your bill-paying history, so it is imperative that you pay your bills consistently.
4. Pay Down Your Credit Cards
Because credit bureaus
5. Do Not Apply for New Credit
Every time you apply for any kind of credit it goes on your credit report as a “hard inquiry.” If you have too many hard inquiries it can negatively affect your score. Resist the temptation to apply for new cards — even if the store or issuer is offering a promotion.
How Mistakes End up on Your Credit Report
Mistakes happen, and sometimes credit bureaus make them. Sometimes, however, it’s the consumer who causes the snafu.
One common mistake people make that causes errors on their credit reports is applying for credit under different names — if you aren’t consistent and you don’t always use your first name and middle initial when you apply, it’s possible that your report could contain information on someone else who has a similar name.
Here are some other errors to watch out for:
- Clerical errors regarding your name or address information
- Loan or credit card payments that have been applied to the wrong account
- Accounts that were reported more than once, making it look like you have more debt than you really do
- An account you closed listed as “closed by grantor,” making it look like the creditor closed it
- Ex-spouse’s debts showing on your report
- Mistakes relating to identity theft
- Bad debts not removed after seven years
If a credit bureau reports erroneous information on your credit report it can have devastating effects. It can make you look like a risky borrower to lenders and impact your ability to get credit. If you want to fix your credit yourself, you must dispute any errors you see on your report — quickly.
How to Clean Up Bad Credit by Disputing Errors
To fix your credit yourself, you must dispute any errors on your credit report. To clean up your credit by disputing errors, you must contact both the organization that reported the information to the bureau and the bureau itself — as quickly as you can. Under the Fair Credit Reporting Act, both parties are required to fix incomplete or wrong information in your report. You can file a dispute online with all three credit bureaus — and Experian accepts only online dispute letters. Unless credit agencies deem your dispute frivolous, they are required by law to investigate it within 30 days.
Use these tips to begin an online dispute with a credit reporting agency:
- Provide your complete name and address.
- Identify each item you want to dispute on your report.
- State all supporting facts and say why you are disputing the information.
- Include copies of documents supporting your claim.
- Request that the agency delete or correct the erroneous information.
- If you are disputing your report via mail, send it certified mail, return receipt requested.
To file a dispute with any of the three credit bureaus, visit their websites:
Make sure you also write to the creditor and to alert it that you are disputing the information it provided to the reporting agency. If the creditor reports the same information to one of the agencies again, it must also send include dispute information. Make sure you request that the creditor copies you on all correspondence with the agency.
How to Repair Your Own Credit With Do-it-Yourself Credit Repair Letters
If you fix your credit yourself, you will have to write credit repair letters. If you don’t have the slightest idea about how to write a credit repair letter, don’t worr — it’s not difficult to write do-it-yourself credit repair letters. You can simply visit myFICO.com and access free, do-it-yourself credit repair letters you can adapt to your personal situation. Within 30 days of sending your credit letter, you’ll hear from credit reporting agency.