Credit Repair Process: Basic Steps And How To Avoid Mistakes

Do you know that a good credit score can help you save money in a number of ways? Yes, it is true. Along with qualifying yourself for a favorable loan, a good credit record also helps you to reduce the premium cost of your insurance. Therefore, if your credit record is not good, go through a credit repair process to improve your credit score.

Steps in a credit repair process:

The basic steps in a credit repair process are discussed below.

• Obtain recent credit reports and review them: At first, obtain recent copy of your credit reports from the credit bureaus, namely, Experian, TransUnion and Equifax. It is quite important that you check each of the 3 reports. Review your reports to find out errors, if any. Make a note of the accounts that have exceeded credit limit and check whether or not any of your past due accounts is sent to any collection agency.

• Dispute inaccurate negative information, if any: You need to inform the credit bureaus in order to dispute inaccurate negative information in your report. Therefore, write a letter with detailed information of your inaccurate item. If you wish, you can make a copy of your credit report, highlight the negative information and sent it to the credit bureau.

• Try to get current on payments: It is quite important to get current on payments in order to improve your credit score. Therefore, try to have your past due accounts being reported as “paid” or “current”. You should work with debt collectors in order to take care of your collection accounts. Make sure you pay the “charge-offs”.

• Bring maxed out credit cards within the limit: Your credit utilization (total outstanding debt compared to your total credit limit) affects 30% of your credit score. Therefore, try to bring your maxed out credit cards within the available limit; it’ll also save you from paying over-the-limit fees.

After disputing the negative items and bringing your cards within the limit, you should open a new account. It will help you to build positive information.

Avoiding mistakes in a credit repair process:

Go through the following lines to know how you can avoid mistakes in a credit repair process.

• Do not dispute too many items in your credit report; the credit bureau may dismiss your dispute.

• Think twice before canceling a credit card especially if it’s your oldest account.

• Make sure you send a dispute letter through a certified mail.

• Do not miss out a credit card payment in order to pay others.

Repairing credit with professional help:

Though you can tackle your credit repair process all by yourself, yet you can seek professional help to do it in a systematic way. A professional credit repair agency examines your report, identifies specific problems and also set up a personalized repayment plan that you can afford.

However, you need to be careful while choosing a professional credit repair service. Do not fall prey to such scams that promise to repair your credit quickly.