Things You'll Need:
- credit reports
- a phone
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Step 1
In order to get a clear picture of how bad your credit actually is, you will need a copy of your credit report from all three credit reporting companies: Experian, EquiFax and TransUnion. Each reporting agency is required to give you one free copy of your credit report each year. You can also receive a free credit report any time you are turned down for credit. There are online sites where you can buy all three reports at once, but free is better, right?
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Step 2
Review your credit report for inaccurate information. Look for accounts where payments haven't been reflected, credit cards that are closed but say they are open, and other errors. You must dispute these in writing, so the companies website is the easiest and fastest way to dispute inaccurate credit information.
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Step 3
The credit reporting company must investigate your claim. It will usually be resolved within 30 days. They will send you an updated credit report and a statement saying that they've either or corrected the error or found no proof that it was an error. Once you've gotten a correction, notify all the credit reporting agencies so they can correct it.
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Step 4
Once you have made sure that your credit report is accurate, you can start to address the negative entries. If you have accounts in collection, that is where you want to start.
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Step 5
For negative entries on your credit report, the only real way to resolve them is through time. You must pay what is in collections and then wait seven years for the item to drop from your credit report. There is NO OTHER WAY. Do not fall for credit repair scams!!!
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Step 6
If you are unable to pay the amounts you owe to a collection company, the best thing you can do is call them and make a deal. Depending on the amount you owe and how long they have been trying to collect, it's likely that you will be able to pay a percentage and instead of having an account in collections, you'll have an account that says, "settled."
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Step 7
During a settlement or even if you are paying off the full amount, collection agencies will work with you to create a repayment plan. Make sure that it's something that will work for you. You don't want to get behind on payments and start all over from scratch.
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Step 8
If you are having trouble working with a collection agency, you can contact the original company with which you had the account in collections. Sometimes they can be helpful in working out payment plans or settlements.
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Step 9
Once you've gotten your bad debt taken care of, you can start working on your good debt. If you have credit cards with no balance, leave them open. Do not close good accounts.
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Step 10
When companies (especially mortgage lenders) are looking at your credit, they are looking at a ratio - how much credit you have vs. how much you've used. So if you have credit totaling $10,000 and have used $9,000 of it, you are in a worse situation than if you have $5,000 in credit and only used $1,000 of it.
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Step 11
If you have positive accounts with a balance, don't get behind on payments! Every good account helps your credit rating! Create a budget and stick to it and remember to get a copy of your credit report every year!
Comments
freeskies said
on 11/9/2009 Why do you shy away from alerting the Public about Federal Laws - Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) - Using the LAW to GO AFTER the Credit Card Companies for their FDCPA and FCRA Violations Each and Every Day! Read the LAW. Thank you.
cinnamongirl said
on 10/27/2008 There are several techniques for removing negative entries from your credit that work faster than 7 years. The scam is paying someone else. Do it yourself is the only way.