Credit repair is basically a process of going through your credit report, finding any inaccuracies, and disputing them. Another part of it is making financial decisions that improve your credit score over time. This can be technical and it’s best done by credit repair services. However, if you want to save money and like to learn new things, you can also repair your credit score yourself. Here’s a guide.
Steps For Repairing Your Credit On Your Own
Disputing Your Credit Report Doesn’t Hurt Your Credit Score
This is not the first step of repairing your credit score, but an important fact. Many people think that disputing anything on their credit reports can hurt their credit score.
Even though when an action is taken on the dispute, it can impact your credit score – for example, removing an inaccurate late payment can improve your credit score, or removing an old, positive account can lower your credit score – but there is no penalty for simply disputing anything on your credit report. If no inaccuracy is found, you don’t get penalized. The report just stays unchanged.
But keep in mind that when you dispute an item on your credit report, the account is marked as disputed. So, any activity won’t be counted or added to the account till the dispute is resolved.
In addition to that, if your account is disputed (under review for a dispute), mortgage lenders and some auto loan companies may not entertain your requests and may suggest that you wait till the dispute is resolved.
How much time does it take? Credit bureaus are responsible for resolving a dispute within 30 days. However, it can still take about 45 days if you submit additional information after filing the dispute or due to other reasons.
Step 1: Get Your Credit Report
You can get one credit report per year from each of the three major credit bureaus (Experian, TransUnion, and Equifax). However, if you do it online, you can actually get one report from each credit bureau every week. Simply, visit annualcreditreport.com. You can also visit the official websites of the respective credit bureaus for your credit report.
Step 2: Review Your Credit Report(s) For Errors
As you may have three credit reports from each credit bureau, you can choose to review one each week, month, or year, or you can review all of them one after the other. If you review your credit reports regularly, you can go the former route. However, if you’re doing it for the first time or after a long time, checking all three of them in quick succession is suggested.
So, what to look for?
Inaccurate Personal Information
Your personal information may include your name, aliases, birth date, addresses, your social security number, and others. Make sure everything is accurate.
Keep in mind that disputing your personal information doesn’t impact your credit score. But it’s still important to correct your personal info to prevent identity theft or a mix-up of your report with another person whose name and birthdate are similar to yours.
Hard Inquiries You Did Not Approve
Hard inquiries occur when you apply for credit and the creditor checks your credit report. This lowers your credit score. So, you must dispute any hard inquiries you can’t recognize.
Remember that if you apply for a loan and the loan is rejected, there may still be a hard inquiry listed on the credit report. This will be accurate. However, if a hard inquiry is not recognizable in a way that you did not apply for a loan from that company, it could mean fraudulent activity or identity theft.
In that case, apart from disputing the hard inquiries for improving your credit score, you should also consult any of the three major credit bureaus to place a free, temporary fraud alert on your profile. With a fraud alert, a new creditor must verify your identity by, usually, calling you. Additionally, you can also report identity theft to the Federal Trade Commission.
Expired Negative Items That Are Still On The Report
Most items on credit reports expire in 7-10 years, even the negative ones. When negative items expire and are hence removed, your credit score may improve. So, you should look for any negative items that are expired but still on the credit report. They can include hard inquiries (2-year expiry), late payments, charge-offs, foreclosures, bankruptcy, closed accounts with negative history, and others.
Moreover, smaller medical debts that are paid (usually under $500) don’t appear on the credit report. If they do, you can dispute them. On the other hand, criminal convictions can stay on the credit report indefinitely. If you’re not sure which items should or shouldn’t be on your credit report, contact an affordable credit repair Staten Island service.
Inaccurate Missed Payments
If a payment is listed as missed when you paid on time, you should dispute it. It can improve your credit score if the bureau can’t verify the late payment.
Duplicate Accounts
If any loan is listed twice in your credit report, it will lower your credit score because the calculations will show you owe more debt than the actual figure. This is usually shown as a high debt-to-income (DTI) ratio, which is bad news.
So, dispute a duplicate account immediately if you find any on your credit report because a lower credit score can make approval for loans and the house buying process difficult, even though it doesn’t has an impact if you’re selling your house.
Step 3: Dispute Mistakes
Once you find a negative inaccuracy, you can dispute it. This one takes the most time. You need to follow a required procedure. Failing to do so can lead to a rejected dispute, so you will have to file the dispute again, correctly.
If you want faster results, you can call the creditor directly and ask to check and correct the information. However, it doesn’t always work, so the regular route of filing the dispute with the credit bureau is what you will have to take.
You have three ways to dispute your credit report information with a credit bureau:
Online
Each credit bureau website has its own interface for filing a dispute. Follow the instructions and attach the required documents.
By Mail
You can also download the dispute form from your credit bureau’s website and then follow the instructions to mail it to the correct address. You can also see a sample dispute letter on the Consumer Financial Protection Bureau (CFPB) website.
By Phone
You can also call the bureau where a dispute specialist will guide you through the process.
What Happens After Filing A Dispute?
After receiving the dispute request, the bureau has 30-45 days to act. The bureau contacts the creditor in question to verify the information. If the information is verified, the item stays on the credit report. But if the information can’t be verified, the item will be removed from the credit report.
In case the negative information is verified and stays on the credit report, you can add a 100-word statement explaining your side of the story. However, many creditors may not see or read it.
You can dispute more than one item with each bureau simultaneously, but never overdo it. A good practice is to dispute only 1-3 items with each bureau.
Conclusion
Repairing your credit report can feel like a complicated task, but if you put your mind to it, you can do it yourself. However, if you want someone who can review your credit report thoroughly to find out inaccuracies and file for disputes with lower rates of rejection, consult a credit repair company Brooklyn.
