Repair Damaged Credit Yourself. You Can!
If your credit rating is holding you back do something about it!
I was driving today and while stopped at a red light, I looked over to my right and along with several cardboard campaign signs, which should be outlawed by the way, but that is for another hub and another day, was a white cardboard sign that simple stated "Credit repaired Anyone $325". There was a number to call below.
I found myself wondering how many people and a paid this person $325 dollars of their hard earned money. In the hope that he or she could turn their spiraling credit history around. Only to be $325 lighter in the pocket and disappointed in the end.
Negative credit has always been around and probably always will. I guess some people are just going to overextend themselves no matter what and some are going to look for a way to avoid paying a legitimate obligation Those are not the people I'm worried about. They are going to live that life no matter what and if you did help them repair their negatives and get back on their feet so to speak, they would be back in trouble in no time.
No the people I'm talking about are the young couple who fell prey to offers of easy credit and just kept getting cards and using them or buying furniture, electronics, whatever, that they didn't necessarily need but there was some smiling salesman standing there with an offer of an easy payment plan.
Before they knew what hit them, their bills began to add up to more than they were bringing home and not knowing what to do, they made the classic mistake of trying to borrow themselves out of debt and I think we all know that simply cannot be done. I could go on about what happened until it was all over and they were left with some worn out stuff and a terrible payment history but suffice it to say they went down in flames and now don't have a clue how to begin to repair their credit.
Take heart, it can be done, I saw it too many times in my 30+ years as a lender and helped too many young couples get back on track not to know without a shadow of a doubt that bad credit can be fixed.
It isn't necessarily easy and it won't happen overnight as these so called credit experts would have you to believe but if you really want to get it straightened out and back on track, read on, because I am going to tell you exactly how.
Step 1. Get a copy of your credit report, preferably one that includes the history from all three repositories, the companies that keep track of credit history and report it to the local agencies for a fee. Those companies are Experian, Trans Union and Equifax. You can go on on line to each of their websites once a year and get a copy of your report for free. Simply go to each of their websites and follow the instructions from there to obtain the report.
Step 2. Don't freak out. It is always and I do mean always worse than it looks. This is for a couple of reasons, there is always duplicate reporting, each company reporting the same debt but maybe in a slightly different manner so that it looks like instead of one account with XYZ company which is what you have that you have three or four. There are also often duplications on the same report with the same result.
This problem is usually pretty easy to correct with an email or phone call. I recommend email because with it you will always have a written record of what was said and should the negotiations become a little testy later on. You have established a precedent that will keep the element of human emotion out of the equation which might cause you to say something in anger that might actually hurt your efforts and as such, you would most certainly regret that.
At any rate once you point out that the duplications exist the company involved will usually correct them right away and send you a copy of a new report. I say usually because once in a while you will get that Jerk whose on a power trip or fighting with his wife who simply refuses to see the obvious. If that happens end the conversation politely hang up and call right back again. These are huge companies with many employees and a battery of customer service reps who do nothing but answer the phone or answer emails and the odds of you getting your call taken or your email read by the same person are slim to none.
Step 3. Once you have cleaned up all the errors, then it is time to move on to the items that are correct, Each item should be addressed in a separate email or letter and should be approached in one of two ways depending on the disposition of the debt. If the bill has been paid and just has a bad rating then there is no choice but the deal with one or all of the reporting agencies. If the bill has an open balance however then you will be able to negotiate with the creditor or his collection representative directly. This usually give you a little extra leverage and can help to speed the process along.
Let's start with the company owed or his collector This person has one job, to collect what he can on the balance. Usually if an account has reached collections it has either been written of by the creditor or is about to be which means that whatever the creditor gets he will usually split with the collector on a 50/50 basis. There in lies his motivation to make the deal work somehow. DON'T BE INTIMIDATED BY THESE GUYS. Remember, they are trained professionals and they will lie to or harass you or make unbelievable threats on which they simply cannot follow through.
This is you strategy. Mr. _________, I want to pay this debt, I really do but my family is in a financial crisis and the best I can offer is to make a monthly payment. I will only do that on one condition. You must report my account as being settled to the credit bureaus and as paid in full without a negative rating as soon as the account is paid and I will need that in writing.
You'll be surprised how many times that will work the first time around, but even if it doesn't if you stick to your guns, the collector will come around and agree to your conditions. Remember, these guys want to get paid.
You can use this procedure with any creditor to whom you have an outstanding balance but a word of caution here do not over commit as to what payment you can make in an effort to get the deal done. You made that mistake once before and look where it took you. Offer as little as $5 per month. If the collector genuinely cannot make that deal, you have started at such a low threshold odds are something can be worked out,
For the accounts that have been paid out and just have a bad rating, I have a few simple words for you. Dispute the account, that's right, send the bureau an email or letter disputing something, anything and you will be quite surprised at how well that will go. Don't get me wrong here. I am not now nor will I ever encourage you to lie but you are perfectly within your rights to dispute a reported account for any reason and I have never seen an account yet that didn't have some kind of discrepancy. The best reason to dispute is the balance on the account. There is very little chance that the balance that shows on the report is correct giving you the perfect right to dispute the account as reported.
The law is on your side here. Creditors are required by law to respond to any dispute and I do mean any regardless of what it is, Within thirty days of the dispute. Not only do they have to do this but they have to do it as often as you file the dispute and there is no limit to how many times you can file other than there has to be a thirty day period lapse before filing the exact same dispute again. If you have multiple reasons to dispute however you can keep them coming for as long as you want. That depends on how aggressive you want to be. If the creditor fails to respond within thirty days, then they are required by law to remove the negatively reported item.
They will usually respond to dispute number one and sometimes two, although there are companies who just cut to the chase and remove the disputed item day one. These are rare but if you file disputes long enough eventually the most stubborn of credit reporters will relent and remove the negative info, just so they won't hear from you again. Remember, these people are human and in truth, don't really care whether your credit is good or bad. It isn't personal and if you start to annoy them enough, they will show you that by removing the item.
Dispute and dispute and dispute and and watch as the negative items fall away each time increasing you credit scores. Negotiate deals with the collectors on your open accounts and watch your reporting change and your scores rise from that as well.
Eventually your credit will be good again from there it will be up to you. In a later hub, if there is an interest in this one. I will tell you how to quickly reestablish good credit which will make you scores even higher.