Can you repair your credit legally?
Once your credit is bad, your life can become quite difficult. It can be hard to get an apartment, a checking account or a credit card.
While you cannot just "erase" bad credit, no matter what the ads say, there are steps you can take to improve your credit.
The first thing you want to do is get a copy of your credit record from the three major credit bureaus. Look them over carefully and dispute anything that is incorrect, and make sure they are all up to date. You will have to provide documentation to prove that any incorrect information is, in fact, incorrect. This can be time consuming, but well worth the effort. It is often recommended that you do this annually, no matter your credit rating.
Most negative information can stay on your record for up to seven years, and you cannot change that. Bankruptcies, however, can stay for up to 10 years.
You have no doubt seen those ads promising to repair your credit for you. Don't bother with those services. The steps you can take legally to repair your credit you can do on your own.
Wondering how to spot the scams? I'll let the FTC tell you about that one.
What steps can you take?
The first step you need to take is to correct your spending habits. This means develop a budget.
List all your income and all your expenditures. Take a good look at your expenditures and see what you can live without, and what you can cut back on. Do you really have to have cable TV? What about just cutting the pay channels? Can you bring lunch to work rather than eating out?
Get copies of your credit report. If you've been denied credit, employment or insurance within the last 60 days, you are legally entitled to a free copy of your credit report. The company denying you is required to tell you which credit bureau's report they based the denial on.
Ask the credit bureau for a dispute form or send your dispute in writing for all incorrect information on your credit report. Send them copies of any documentation you may have but KEEP THE ORIGINALS.
The credit bureau must investigate your dispute within 30 days, unless your dispute is classified as frivolous. The credit bureau must forward the information you provide them to the creditor, who must investigate and report back. If the information is found to be inaccurate, they must report it to all nationwide credit bureaus.
If the information cannot be verified, then the credit bureau must delete it.
Once the investigation is complete, the credit bureau must send you the results and a new, corrected credit report if a change was made.
It is also a good idea to send any disputes to your creditor reporting it, as they must then label the item as disputed, or remove it if the information was not accurate.
Now you are working towards better credit, but maybe your score is still nothing to brag about... or get credit with. Maybe you have a bankruptcy on your credit report, and years to go before it comes off. What can you do?
Work slowly towards building your credit score back up. There are credit cards available even to those with poor credit. Get just one for now, use it as little as possible and pay it off every month. Contrary to popular belief, you do not have to carry a balance to build your credit.
What about tax liens, debts sent to collectors, charge offs, late payments and so forth? Get those paid off and make sure the payments are reported to the credit agency. Make sure you dispute any that are incorrect.
Don't forget legitimate credit counselors. They can help you, but you have to watch out for scams. Read my article on debt consolidation for more on this option.
Fixing poor credit is time consuming, but necessary for so many reasons. Be sure to stick to legal methods, and your credit will improve.
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