While it is possible to live with bad credit in the United States, it can also be tough. People with bad credit experience have difficulty in so many things and find everything more expensive.
An example is the higher interest rates charged for drivers with bad credit scores. Your credit score will also be the determining factor on whether you will be required by a company to pay a security deposit when you do your purchases or not. Banks also check your credit scores when you apply for a credit card or a loan, and even in the near future, more and more companies will be practicing credit check.
Why is credit repair important?
While credit repair is crucial to saving money on insurance, credit cards, and loans, these are not the only reasons on why you need to repair your credit. With a better credit score, you will be open to new employment opportunities as well as raises and promotions with your current employer.
If you have also given business thought in the future or just want to be secured at the fact that you can easily borrow money whenever you need to, you should be able to repair your credit as soon as possible.
How to do your own credit repair
1. Get the latest copies of your credit report
Before you even begin repairing your credit, it is important for you to know and understand the things that need repairing. Your credit report indicates all the mistakes you have committed which led to your bad credit. Read through the details of your credit report so that you will be able to understand the items that are negatively affecting your credit score.
The law states that you are entitled to free credit reports from each of the three credit bureaus every year. You can access this report by visiting AnnualCreditReport.com, or you can also order it by phone or e-mail.
You should also know that you are entitled to a free credit report if you have been rejected for credit because there is something found on your credit report, you are currently unemployed and looking for a job soon, you are probably receiving government assistance at present, or you have been a victim of credit card fraud or identity theft.
2. Review your credit reports for possible errors
As soon as you have received your credit card reports, you have to go through them completely. Try your best not to be overwhelmed with all the information and just digest them one by one. If you need several days before you will be able to understand everything, don’t hesitate to take your time.
When reading your credit report, you will be able to see your personal identifying information, detailed history of your accounts, any items that have been classified as a public record, and inquiries that have been made in reference to your credit report.
Next step is for you to determine the things that need to be repaired, including incorrect information and charges, past due accounts, and maxed out accounts which are over your credit limit.
3. Dispute credit report errors
Remember that it is always your right to dispute if there is any incorrect or inaccurate information in your credit report. You will be receiving instructions on how to process dispute for your credit report as soon as you receive it.
If you want a faster and easier way to dispute your credit score, you can do it online; however, you will not have any tangible documentation unless you take screenshots. But this is something that you cannot do over the phone. You can also opt for sending your disputes through regular mail because it offers a number of advantages.
For one, you can send the proof supporting your dispute and you can also keep your own copy of the dispute letter for your personal record. Sending your dispute via mail will also indicate the time when you had it mailed or sent, which is important because credit bureaus usually have 30 to 45 days timeframe for investigating and responding to your dispute.
4. Tackle your past due accounts
Your payment history is one of the things that can have a major impact on your credit score, which is why it is important for you to avoid several past due accounts. Addressing or avoiding past due accounts is one of the most crucial steps to credit repair.
You must also make sure to get current on accounts that are past due but are not yet charged off.
5. Bring high account balances below your limit
Remember that the higher your balances are, the more they will negatively affect your credit score. Make sure to bring the maxed out credit cards below the credit limit and then work on paying the balances off completely.