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5 Quick Steps to Guide You on Your Credit Repair Journey

Updated on March 17, 2015

If you were to type in the words “credit repair” into any of the major search engines over the internet, chances are you’ll uncover a whirlwind of information. Credit repair appears to be everywhere! In fact, the “Great Recession of 2008-2010,” along with doing major damage to the U.S. financial system, has severely damaged the credit ratings of millions of U.S. consumers. What’s credit repair? In its heyday, the credit repairing industry became synonymous with shady characters that were only out to steal monies from its clients. Nowadays, things have changed for the better: for the millions of consumers who are in need of professional credit repairing advice, there now exists a variety of certified professionals (i.e., credit counselors, credit lawyers, debt specialist, etc.) who have been trained to guide consumers through the maze of the credit repairing industry. Nevertheless, if you're interested in improving or protecting your credit scores on your own, below is a brief step by step guide that should serve to help get you on your way.

Step #1 Getting Copies of Your Credit Reports…

Any credit repair journey must first begin with obtaining copies of your credit reports from the three major credit bureaus, which consist of Equifax, Transunion and Experian. Much of what these credit reporting agencies do isn’t too hard to understand: they collect information about you and sell it to potential lenders. Credit report analysis is critical. In order to repair your credit, first you have to see what needs fixing. You can obtain free copies of your credit reports once a year by visiting

Step #2 Verifying Your Identity…

In order to obtain copies of your credit reports from Equifax, Transunion and Experian, you’ll first need to verify your identity. The questions asked aren’t really that complicated to answer—in fact, they’re mainly designed to simply confirm your identity, which is why they ask you questions about previous addresses, phone numbers and even relatives you may have once lived with. Be prepared to respond correctly, or the system will shout you out; thus, denying you access to your credit reports. If for some reason you can’t access your credit reports online, the website will provide you with a toll free number and mailing address to obtain hard copies of your reports instead.

Step #3 Reviewing Your Credit Reports for Errors…

Reviewing your credit reports for errors involves three things: 1) viewing inaccurate information that may have inadvertently showed up on reports 2) viewing obsolete information, which is outdated information that has surpassed the seven or ten year reporting mark; and more importantly 3) viewing incomplete or unverifiable information, which is a very broad term credit reporting agencies enacted that allows for the disputation of most things on your credit report. In essence, if you feel that an item is inaccurate on your credit report and the credit bureaus (in a 30 to 45 day time period) are unable to “verify” that it's, indeed, accurate, then under the Fair Credit Reporting Act (FCRA), they must remove that information. Case in point: removing any negative items from your report will certainly increase your FICO scores. Conversely, you should never dispute any trade lines that are actually helping your scores (namely, trade lines notated as “paid as agreed”).

Step #4 Interacting With the Credit Reporting Agencies…

The advent of modern technology and the internet has made the credit communication process between consumers and the CRAs a lot easier, allowing for a large number of U.S. consumers to now repair his or her own credit—and in a more concise manner. Consumers are now able to communicate with CRAs online, by phone or by mail correspondence. The thing you’ll certainly want to keep in mind is that; although, disputing online appears to be more user friendly, most experts would advocate requesting an actual physical copy of your credit reports. These hard copies (as they are known) contains more in depth information about negative trade lines, thereby increasing the odds that you’ll get certain items deleted. Credit repair takes time. Taking anywhere from 12 to 36 months to see drastic credit score improvements, credit repair isn’t an overnight quick fix. In fact, it can take anywhere from 30 to 45 days to receive a corrected copy of your credit report. So be patient!

Step #5 Interacting With The Original Creditors…

Perhaps you’ve got your finances back on track? Surprisingly, one of the few places you could turn to for help is the original creditor (OC) itself. In fact, no matter how much disputing and time you put into repairing your credit, certain items will never be removed without actually paying the debt off. And if you’re able to now pay for the debt—why not work out a payment arrangement with the creditor itself? Some OCs will delete the entire trade line in lieu of payment. Known as a pay for delete (PFD), this tactic can be used to get rid of some of the most stubborn trade lines. In addition, a “goodwill” letter is just what the name implies: it is a letter sent in goodwill to the OC explaining your particular situation in the hopes of winning his or her favor. Removal of a late payment may appear to be trivial on the surface, but when a 50 point score increase means the difference between a low interest rate loan or no loan at all, a goodwill letter becomes a very powerful credit repairing tool.

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