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A Quick Lesson in Credit Repair

Credit Repair Rule Number One

The first rule in the world of credit repair: Give yourself the benefit of the doubt. You cannot afford to believe everything that is on your credit report just because it is in writing. Over three quarters of all credit reports have errors on them. Don’t be a victim of reporting errors. These errors can depress your scores and cost you money. Now is the time to take a stand.

Proofread Your Credit Reports

Get your credit reports. You need all three bureaus to do the job right. I personally suggest that you invest a few dollars in the process and get a nice tri-merged report instead of individual reports from the three bureaus. Tri-merged reports are designed for clarity. This can make your credit repair job much easier. If you get individual reports you will discover that they each come in a unique format, and can be hard to understand. No need to struggle.

Correct Card Limits

Here is a tricky issue that most people don’t pick up on. Many credit card issuers under-report card limits. This matters because your credit score is heavily influenced by the relationship between your balances and your limits. If a limit is under-reported it will appear to the credit scoring formula that you are using a higher percentage of your card than you really are. Put on your reading glasses and catch every mistake!

Eliminate Duplicate Accounts

Another little problem that slips under most people’s radar screen is duplicate accounts. These may not be derogatory at all but may be hurting your credit score by making it appear as if you have more debt than you really do. Clean up your reports and have these duplicates removed.

Dispute Most Collections

Many people are not aware of the fact that collectors are supposed to remove collection accounts from your credit report when they sell your debt to another collector or send it back to the original creditor. Collections are bought and sold so often that it is worth challenging most collections. Focus on older and smaller accounts. Don’t dispute new accounts that you know are correct. This is a powerful credit repair technique for eliminating reporting violations, not for eliminating legitimate debt.

Dispute all Unknown Items

Many consumers are a victim of a common credit reporting breakdown called a file merger error. If you share similar identifying characteristics with another person their accounts may be mixed with yours. You should first contact the creditor directly and ask if they really have an account in your name. If they say no, dispute the issue with the credit bureau; if they say yes, and you know that you never opened an account with them, you may be a victim of identity theft and you should contact a credit repair expert for advice right away.

Build New Credit Today

Don’t wait until your credit is great before building new credit. You need to start today. The right way to rebuild credit is with MasterCard and Visa accounts. Stay away from store cards and consumer debt. If you feel that you will be denied for new credit cards, get secured cards. You won’t be denied and you will get a much needed head start on building your credit scores. Secured cards are the ideal credit repair tool.

Close Store Accounts

Store cards and consumer debt, like furniture store loans, are not an option for re-building your credit. The credit scoring formula has a built-in bias against this type of debt and your scores will suffer. As mentioned, stick with MasterCard and Visa. If you have open store cards or consumer debt, start chipping away at the balances now and close the accounts if you have no further use for them.

Consult a Credit Repair Expert

You don’t have to do this on your own. You should consider contacting a reputable credit repair company and employing them for the job. Most professional services are extremely affordable and will provide ample support and information as they do the job and leave you with the education you need to maintain your scores once you complete their program. Good luck!

15 April 2009 | Credit | Comments

A Quick Lesson in Credit Repair

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