A low credit score can bar you from getting affordable rates on your loans. If you’re in the market for taking out mortgage loans, insurance policies or even auto loans, you must initially go for credit repair. With a poor credit rating, you may even get help from a professional firm. However, you must be thinking whether it is necessary to consult a firm for boosting your tarnished score. What extra tips do you need to follow to fix your credit report? Read the entire article to get the answer.
Credit score gets affected when you have huge unpaid debts. But, you can still improve your credit by starting to pay off the debts. Once you pay off the outstanding debts in full, your account status will be updated as “Paid in full”. Thus, your score will improve.
Try to get your credit report from each of the 3 major credit bureaus like Experian, Transunion, and Equifax. Thus, you’ll be able to know your credit score and take necessary steps to improve credit score. You’re eligible to get one free credit report from each of the credit bureaus once every year.
Check the credit reports carefully and mark the wrong listings you want to dispute. You need to keep all the documents mentioned in the dispute form.
You should contact and ask your creditors to verify the report. Write down the bank’s name, the collection agency, or the creditor who has put negative feedback on your credit report. You have rights to ask them to prove that the debts that they’ve listed are yours. You can ask them about the calculation they made. Be strong and let them understand that they either need to prove that you owe the debt, or they have to remove the listing from the credit report.
Recheck your report and confirm that the creditor removes the negative listing from your credit report. If you find that they don’t do so within 30 days, then you can send them a reminder letter. If you don't get any reply, then you can complain about them to the Federal Trade Commission, and report the unauthorized negative listings they have made.
You have rights to dispute errors that have been shown in your credit report. Dispute any error by writing a well-documented letter to all the credit bureaus, mentioning the errors that are affecting your credit score negatively. Remember, the credit bureau investigates your dispute. If the credit bureau finds your claim as justified, then the bureau will make necessary changes in the credit report and reply to you. On the other hand, if the credit bureau finds your claim as unjustified, then the bureau will not make any changes in the report.
You should try to lower the usage of your credit cards. Thus, you’ll be able to easily make your debt payments. As said in the above point on-time payments help in credit repair. But, if you have several and high debts, then you may face problems in making the payments. Opt for a secured credit card. With the help of secured credit cards, you may be able to make payments on that. You can get a secured credit card even if you have bad credit.
If required, you can make a complaint to FTC. If the creditors don’t answer your letter regarding your outstanding dues, then you can make the complaint against the creditor. According to the Fair Debt Collection Practices Act, the creditor should not list any wrong feedback in a credit report.
Read more: The importance of Credit Repair
If you have been a good debtor in past and have good relation with the creditors, then you can ask for forgiveness. In that case, you have to prove that you had a bad phase and due to that difficulty, you missed the payments. Thus, you might be able to get forgiveness. However, there is no guarantee that a creditor will forgive your due loans.
You must try to dispute the older negative listing that is in the report for a long time. Use the above mention method for clearing the old negative listing.
You should keep all the documents safely that you received from the CRA. You may have to show them in the court if required.
Closing old credit card accounts is not a solution. Because your older accounts will prove your stability, paying habits by showing your history. Keep the credit card at home instead of closing them all of a sudden.
Remember, each time you apply for a credit, your credit report will be checked. Moreover, using credit will hurt your score.
You can monitor the dispute status on the Experian website. The website sends a notification of the dispute. You need to provide your credit report number and SSN to view the information.
Living with bad credit makes things more difficult and expensive too. It hampers your chances of obtaining a new credit with good terms and conditions. Good credit is important in saving money on insurance, loans, and credit cards as well. So, you must follow the above strategies that can help you to build a good credit report.