Ways To Get Out Of Debt

Repair Credit: How to Figure It Out.

July 29th, 2010

It really is not that difficult to figure out how to repair your credit. This article is going to cover the basics and give you some food for thought regarding credit repair companies and what they do.

The obvious first place to start is with your credit report. If you have been denied for a mortgage, an auto loan, or credit card, you have a right to a free copy of your credit report. If, on the other hand, you know you have errors on your report and you want to get them cleaned up before you apply for a loan, you can get your free credit report at www.annualcreditreport.com. I would suggest that you go ahead and apply for the loan you are seeking. If you get turned down, your loan officer will help you identify the items on your credit report that are causing the denial and your loan officer will also be a good resource for figuring out how to repair your credit.

Once you have your credit report in hand and you have identified the information on the report that is erroneous and/or inaccurate, you need to dispute that information. It would be nice if you could just call the credit reporting agencies and tell them to remove this inaccurate data from your report, but it is not that easy. The step you need to take now is finding a dispute letter that will get the attention of the credit reporting agency. You can certainly write your own letter. However, you risk doing it wrong. Sample credit repair letter templates exist on the web. Some are better than others. You will have to browse them and make a choice.

After deciding on a letter template you will need to add the data from each account you wish to dispute. You get the data from the credit report(s) that you have. You might have to write the same letter three times because you have to dispute the same thing with three different credit reporting agencies. The data that you need to put into the letters from the credit reports would be the name of the creditor and the account number. Also, you will want to include with your letters any evidence to support why the data on the credit report is erroneous. This is not required, but it can help.

After you have written up all the letters (if you have a lot to dispute, you should set aside plenty of time to do this), you will need to create an “ID” page. The Identification Page should consist of three things: your current driver’s license with your correct address, your social security card, and a utility bill for your current residence. It is very important that all the addresses match. The reason for the ID page is simple. The credit bureaus want to be sure that it is definitely you sending the dispute to them. This is very important because the credit bureaus are always looking for ways to throw out your letter if they can consider it to be frivolous.

You will include an ID page with every letter. You should be able to find the addresses of the different credit reporting agencies on the credit report that you have. If you were working with a loan officer and they sent you a credit report, call them and ask them where the addresses of the credit bureaus are on your credit report. Your letters should be in a business letter format with your name and address as the header and the recipient’s name and address on the left hand side below the header. Also, you should include your social security number underneath your name and signature. Make sure you sign all the letters and get them in the mail.

Credit repair is really not a difficult process. The most difficult part about it is finding the time to do it. It is sort of like changing the oil in your car. There is nothing difficult about it and anyone could do it on their own if they had the time and a few ordinary tools. Most people don’t really want to mess with it though so they look for a different way to get the job done. The same is true with credit repair and that is why credit repair companies are popping up all over the place. The problem with credit repair companies is that, unlike an oil change which costs $29.95, most credit repair companies charge a lot for their service. They know that credit repair can be overwhelming for most people and most people don’t have the time to figure it out. Be careful with credit repair companies. Read the fine print. And read the large print. The old saying is not always true that ‘you get what you pay for’. Some companies are charging hundreds and even into the thousands for credit repair. If you pay a thousand dollars for credit repair, they should be giving you a gold plated credit report in return. But that is not going to happen. Credit repair companies cannot get anything off your credit report that is accurate unless it happens by accident. Credit repair companies are simply going to write all these letters for you. They are going to get a copy of your credit report for you. They will in some cases even sign your letters for you if you give them a power of attorney which allows them to do that. This can be very convenient, but you have to weigh the price against the convenience. You certainly have the ability to send out letters on your own that will be just as effective as the letters the credit reporting company will send out for you.