First Steps to Fixing Your Credit

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It’s a Catch-22, really. You need a good job so that you can get yourself out of the mess you are in and get your bills caught up. Yet, you get turned down for a good job on the basis of a credit report. Seems like a vicious cycle that you can’t break out of!!! There has got to be a way to clean up your credit report, so that you can do things with your life again. What is really scary is that research has shown that error rates on credit reports generated by the three major reporting agencies can run as high as 40%! So, your quality of life may be impaired needlessly.

Before you learn how to repair your credit, learn about the hoops that the credit reporting agencies make you jump through, discover your legal rights in correcting the credit agencies’ data, or learn the strategies to use in your communications with them, you first must learn what the credit bureaus are saying about you. You MUST get your credit reports – all three of them. The three major credit reporting agencies probably have a report on you. You must see for yourself what’s on each of these three reports. If you have been recently denied credit, you are entitled to a free copy of your report, but it may only come from one of the three bureaus.

This site will walk you through downloading each of the three credit reports. You can order your credit score from each of the three agencies for about $9 per report.

When you have your reports in hand, the next step is to print and copy them; giving you one original, one working copy to make notes on, and one copy to mail out as needed.

The reports can be puzzling to read, so give yourself a break and devote a couple of days to reading the instructions and contents of each report. The reports should have some instructions to help you decipher the information on the report. By the way, if you take the time to get your credit reports and analyze them, you are way ahead of over half of the people who really need help, but who do nothing to help themselves.

Using your “mark-up” or working copy and two different colors of markers or highlighters, start looking for mistakes on the report. Scan through all of your personal information at the top of the report: name (and previous names used),current employer and previous employment, Social Security number, address and previous addresses, date of birth, and any other information. Choose one color to use for mistakes, such as mis-spellings, transposed numbers, etc. Using the other color, circle or highlight all derogatory credit entries. Once you are finished with the personal information section, do the same for the other sections of the report: Public Records and Judgements; Inquiries; and Consumer Accounts. You will probably find many mistakes, such as company names that you don’t recognize. Keep in mind that corporations may use many fictitious names and use an unfamiliar name for reporting purposes. Check the start and last activity dates of the accounts in question and the account number to determine if this is your account or an error in reporting.

Once you have checked the reports from all three bureaus, make a list of all items that show mistakes. A spreadsheet program is a wonderful tool for formatting this information into an easy to read report. You are now ready to “face your enemy on the field of battle”.

The law that gives you the right to dispute items on your credit report that you believe to be in error is called the Fair Credit Reporting Act. This law forces the credit bureau to verify with the creditor (or other reporting party) any information that the consumer disputes. The easiest items to dispute are old accounts (more than five years old) with high dollar values that were paid late. It is best to pick and choose which items that you are going to dispute, rather than to question everything on the report. You have more of a chance of winning the disputes and raising your credit score if you are choosy, and pick items that are easily contested.

The best way to submit disputes is by mail, with delivery confirmation/return receipt service. The extra charge is worth saving the time and effort if the credit bureau claims: “We never got your dispute letter”. In your dispute letter, include the name of the creditor, account number, your Social Security number and date of birth. It is best to include a copy of your “mark up copy” of your credit report, with the disputed account(s) circled. Here are the addresses of the three major credit bureaus:

Equifax Credit Information Services, Inc
P.O. Box 740241
Atlanta, GA 30374

P.O. Box 1000
Chester, PA 19022

P.O. Box 2002
Allen, TX 75013

Forget about disputing by telephone or online. To be effective, you must have a written record, with a hard copy proof of receipt. Remember that any items that the credit bureau cannot verify with the creditor MUST be removed from your report. Once disputed items start coming off, you can watch your score start to climb!