Credit repairing is something that everybody should know how to do since having a good credit report has become an essential part of modern lives. Having a good credit score is not only essential to being able to borrow money at reasonable interest rate.
It may also affect your ability to get a job, since many employers also check credit reports to see how trustworthy applicants are. A recent study estimated that half of employers look at credit reports as part of background checks. This is used by employers in making their hiring decisions, particularly for positions that involve handling large sums of money or having access to confidential employee information. A bad credit report can cause job offers to be withdrawn or applicants to be removed from consideration for a sensitive position.
Here are four easy steps to follow when repairing your credit.
Step one: Be familiar with your credit report
Many people are not aware that they are eligible for a free copy of their credit report every year. The can get their reports from the three major credit bureaus by conveniently requesting for it through the Annual Credit Report website. In addition, if you’ve ever been refused credit, denied insurance or turned down for a job because of your credit report, you have the right to get a free report from the reporting bureau that provided the report. The company that refused you on the basis of the report must provide the name of the agency as well as their contact information. You have sixty days from the date you received the denial notice to request for your report.
Step two: Go over your credit reports carefully
While there is little you can do in the short-term to eliminate entries documenting negative information such as late payments, there are probably entries in your report that are inaccurate due to reporting errors committed by the credit bureau. Errors on credit reports are more common than most people realize but may not be caught because of a variety of reasons; including appearing after the consumer has already requested for their annual report.
Step three: Dispute errors
Dispute errors that you find on your report by either filling up the dispute form that is provided with the report or writing a letter to the relevant agency. It is important to include a photocopy of your report with errors that you find circled together with your letter of dispute. You will also have to provide documentation supporting your claim that particular entries are erroneous.
This is why it is important that you keep copies of documents such as credit card receipts in a file for convenient access. Photocopy these documents and submit them along with the dispute letter. And keep copies of all the correspondence that you send to the credit agency, as well as the documents you provided them in support of your claims. The credit bureau is required to investigate your dispute within thirty days after they receive your letter and remove any errors that they find. They are then required to send you a copy of their findings along with an updated credit report that reflects the corrections they made.
Step Four: Start paying down your debts
If you are having trouble making your debt payments, compute the amount of money that you need to settle your debts every month. Try freeing up more money that you can apply towards debt payments by changing your spending habits. If this is not enough, you can try to earn more money by taking a second job or starting a small home business. Alternately, you can sell some of your possessions that you don’t need so that you’ll have more money for your credit repairing efforts.