Repairing Your Credit – You Can Do It

Any one of us, even the most responsible, can fall victim to a financial crisis that leads to a poor credit report. A lost job or a health crisis can cause a period of financial struggle that leads to late payments or even default, causing your credit standing to be damaged. While a damaged credit report is a serious matter, affecting many aspects of your life, from loan and credit applications, to rental and employment applications, and even insurance rates, it is not the end of the world, nor will it last forever. There are many steps you can take along the road to credit repair, and each will bring you a little closer to that good credit report you seek.

Check for Report Errors

The first step in getting your financial picture back in shape is to obtain a copy of your credit report, and see exactly what you are up against. There are many opportunities to get a low cost copy of your credit reports, and most are entitled to receive a free copy once a year. Your credit report is the repository of your credit history, positive and negative. At least, it should be and that is one of the reasons that you need to review it. Once you have your credit report, you’ll need to look it over carefully, from top to bottom, checking for incorrect or inaccurate information. Correcting any errors it may contain can be done by contacting the creditors involved, as well as by contacting the issuing credit reporting agency, which has an obligation, under law, to respond to your concerns, investigating and adjusting the error, if warranted, within 30 days. This is a good way to start the repair process.

Add Positive Credit to Your Report

You can add some balance to your credit report by adding some good credit information, rather than allowing only the worst to appear. This can help creditors to have a better overall view and opinion of your credit history. There is no requirement for creditors to report to a credit bureau, and some do not. If your credit accounts that are in good standing do not appear on your report, you can contact those creditors, and notify them that they will receive contact from a credit bureau requesting information with your permission. You may need to submit written permission for them to be able to release your account information. After this is accomplished, you can contact the credit bureau. For a small fee, most credit reporting agencies will take the names and phone numbers of those creditors, contact them, and include their information in your credit report.

Negotiate Directly With Creditors

If your poor credit was a temporary crisis in an otherwise good financial relationship, due to uncontrollable circumstances such as a hospitalization or temporary unemployment, you may be able to persuade your creditor to upgrade your credit status. If you explain your trouble, and point out that it has been successfully resolved, and that your account is now in good standing, it is possible that the creditor will be convinced to indicate on your report that you have brought the account current, or even remove the damaging information.

If you have debts that have not been resolved, you may be able to work out a payment plan with the creditor in return for an upgrade of your credit status. If you are offering a reasonable payment arrangement on a debt that may be charged-off, or has been already, they may be willing to negotiate rather than not be paid at all. This may not be easy to accomplish, as you are not their favorite customer at the moment, but if you are patient and polite, you may get the desired result. Persistence is the key, if the customer service person you are speaking to is unwilling to negotiate, or does not have the authority to do so, ask to speak to a supervisor. If you do successfully reach an agreement, be sure that you have it in writing.

Express Your Side Of The Story In Your Credit Report

You are entitled to include a statement of one hundred words or less on you own behalf in your credit report. If your damaging credit information is due to a dispute with a creditor, you can detail the matter. If your credit issues were due to a job loss or illness, and temporary in nature, you can add a statement explaining its nature and successful resolution. If your credit history shows responsible habits before and after such an incident, your statement can mitigate the poor credit information. To do this, you must write the credit bureau with your identifying information and a request to include a consumer statement in your credit report. You should include your statement with your request, making sure that it is as concise and factual as possible.

Waiting It Out

In most cases, damaging credit information is removed from your credit report after seven years, though some may last as long as 10 years. If you are careful to keep your accounts in good standing, and avoid the addition of any further stains on your credit, you can start with a clean slate after this period has passed. In most circumstances, you will not have to do without credit during this time, as long as you can demonstrate a stable income, and your current accounts are up to date, you will be likely to obtain new credit within a year or two. If so, you are on the path to rebuilding good credit.

Credit Repair Companies

If there are errors in your credit history, these companies can legitimately have them removed, disputing them using a process within the Fair Credit Reporting Act called reinvestigation. Unfortunately, some companies use fraudulent tactics to remove accurate information with this same reinvestigation process. These companies depend on the reality that many creditors have neither the time nor work force to respond to all credit bureau reinvestigation requests with which they are presented. Legally, if a creditor does not respond to such a request, the information must be removed form your credit report. These companies can be persistent, and can make your report look better, but quite often not through honest means. Furthermore, for the most part, these types of companies – when they use legitimate tactics – do nothing that you can’t do for yourself, with a little knowledge and confidence.

While having poor credit can be a hardship and an embarrassing situation for many, it can happen to anyone given the right unfortunate set of circumstances. With patience and persistence, you can restore your good credit over time. As you move forward, with financial stability again shown in your current accounts, creditors will come to see your situation as a temporary blemish on an otherwise good history, placing you back in good standing as a valued customer.