Methods of Credit Repair

Good credit is everything in this world. People with good credit can buy a home, cars, boats, get unsecured credit cards, and even be offered better paying jobs. While some people have been successful in maintaining a good credit score, others have had trouble for one reason or another. Bad credit can be the result of poor money management, job loss, death or illness, fraud, and much more. Anyone that is struggling needs to consider credit repair to get back on top.

The process associated with credit repair requires a little bit of work and a lot of patience but the outcome is worth it. The first step is that a current credit report needs to be requested from all three reporting agencies to include TransUnion, Equifax, and Experian. The reason is that while some information will be reported across the board, some creditors only report to one or two of the agencies. Therefore, if a person were to go through the process of credit repair for only one agency, they might be missing very important information reported through another agency.

Everyone is entitled to a free report from all three agencies within a 12-month period and after that, there is a nominal fee. After contacting the agencies and receiving copies of the report, the individual would need to start by making copies from which to work. Working on one of the copies, the individual would go through and identify not only obvious mistakes, but also omissions and erroneous information. The specific types of information that need to be looked for would include the following:

? Accounts that have been paid off in full but still being reported with outstanding balances

? Accounts that were behind on payments that the person brought current but are still showing as past due

? Missing accounts in good standing

? Accounts not belonging to the person

? Incorrect information such as name, address, employment, etc

? Inquiries never made by the individual

Taking a yellow highlighting pen, the individual should go through and mark anything on the reports that is wrong in one way or another. Again, the credit repair process takes a little bit of time but is important in that nothing should be missed. For any paid off accounts or those brought current being reported incorrectly, the creditor should be contacted and asked to provide a letter or some type of statement to confirm the account?s good standing. Once everything is in order, the next step for credit repair would involve a letter being written by the individual that briefly outlines the errors needing to be fixed.

Next, the individual would take the highlighted copy of the credit reports, take three copies of any letters or statements, and then send the appropriate report along with one copy of the letter/statement to the respective reporting agency. Now, people need to understand that these three credit bureaus receive thousands of such requests daily. Therefore, by law they are allowed 30 days to provide a response.

Typically, within the 30-day period, the individual working on credit repair would receive a short letter along with an updated report. However, in most cases, something is missed. This means that the person would need to go through the process again, painstakingly looking for anything that he or she might have missed on the first go around or that the credit bureau failed to change. In some instances, the reporting agency will disagree with something that has been pointed out, which may require additional information to be submitted.

A person?s credit score, known as FICO, is what creditors look at to determine if credit would or would not be offered. Great credit is anything 700 and above, a good score would range from 620 to 699, a fair score would be 500 to 619, and a bad score would be anything falling below 499. In addition to credit repair helping build strong credit, it also has a direct link to the level of interest rate a person would pay on future loans. People with bad credit will automatically pay a higher rate while those with great credit get the best rates.

Additionally, credit repair is important when it comes to employment. Only in the past several years has a person?s credit been a part of the hiring process. While this is a controversial practice, the concept is that people with good to great credit are more reliable. Unfortunately, many qualified people have been passed over for jobs due to bad credit that was out of their control. Regardless, to get the best out of life, going through the process of credit repair is necessary.

In most cases, an individual can handle the credit repair alone but in cases where the reports have become so entangled with misinformation, a professional company that offers credit repair services would prove to be beneficial.