It is your responsibility to ensure that your credit records are accurate. The best way to do this is to order a copy of your credit report from each of the 3 major Credit Reporting Agencies (CRA’s) and see what is on there. To get information on how to obtain a free credit report, visit:
When you get your credit report, you will find many entries, and among them could be:
- Accurate credit information
- Inaccurate credit information
- Outdated information
- Positive Credit Ratings
- Negative Credit Ratings
- Information about judgments, liens, or bankruptcies
- Any combination of the above items.
The first thing is to not feel that all is lost because you have made some financial mistakes in the past. The most important thing is to have a mind set to change any poor financial habits, reduce excessive spending, and learn to save.
Next, keep in mind that any information that is on your credit report that is not accurate will usually be removed, and in fact there are laws which the CRA’s must abide by such as the Fair Credit Reporting Act which require them to remove such information. Once you have identified the items that are inaccurate, you should write a letter to the credit bureau explaining to them why a certain item is inaccurate. For example something that simply does not “belong to you” can be challenged and the CRA must attempt to verify that it is yours. If they cannot do so within 30 days, they must remove the item from your credit report. Keep in mind however, that it may be illegal in some regions to dispute information that is rightfully yours.
For negative items such as judgments, liens, charged off accounts, and the like that you have identified as valid, make a list of them from lowest balance to the highest balance and then begin contacting them one by one to make payment arrangements with them. It is important to pay them in the order of smallest balance to greatest balance because you will pay off more accounts faster which reflect better on your credit rating. Some will be willing to accept payments and will remove your negative marks or upgrade the ratings as you prove yourself with the new payment arrangement.
The Federal Trade Commission has several resources to help you get your credit restored without using credit repair firms (many of which are unethical). Visit the FTC website for more info:
Our team of financial experts are here to help you get through your credit challenges and on to home ownership. We work closely with Lexington Law , a Law firm that specializes in credit repair. You can visit the Lexington Law site here and enter our client credit restoration program.
If you want the resources to do your credit repair yourself, we recommend getting a copy of The Bankruptcy Mortgage Book.