Today, we’ve got a quick guest post from one of the community members over at Credit Magic. Still on autopilot, will get back to regular writing after The Big Day.
Repairing your credit report and removing negative items can make your financial life much easier. The reason? Because good credit is required to get home mortgages, auto loans, credit cards, and more. Credit repair thus, becomes very essential. To repair your credit record, you can get help from a credit repair company or do it on your own.
These are a few steps that you can follow in order to repair your credit record. This, in turn, will improve your credit score.
1. Evaluation of credit report
The first step in credit repair would be the evaluation of your credit record. Before you start repairing your credit, you must first know what you need to repair. You can order your credit reports from any of the three bureaus: Equifax, Experian, or Trans Union. Remember, the only free credit reports are found at AnnualCreditReport.
2. Review your reports
Go through your reports and highlight what needs repairing. These could include: any past due or charged off accounts, accounts sent to collections, or any incorrect information. All of these will then need to be disputed with the credit bureaus.
3. Dispute inaccurate information
You have the right to dispute any negative items contained in your credit report. The credit bureau has 30 days to verify the information; if this cannot be done the information must be deleted.
4. Past due accounts must be tackled
Past due accounts have a negative impact on your score. Try to repay charge offs. A charge off is a debt assumed to be noncollectable, by debt collectors. However, it is still legally valid and the creditor can attempt to collect the full amount.
5. New credit
You may need to establish new credit by opening up a new account. Try to get positive items added to your credit history. Keep your balances at a reasonable level and make payments on time.
In case you cannot handle the credit repair yourself, seek the help of a qualified credit repair company. Accepting professional help may also be worthwhile if you have a particularly difficult credit history.
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How long does it take for your credit score to reflect those changes?
@ Jenna:
Thanks for your 2nd comment & revisit! Welcome to the community. :)
From what I found, it looks like it can take anywhere from 1-3 months depending on when those organizations report to the credit agencies. Paying bills on time is the #1 thing to start now and get into the habit of doing.
If you want to see a breakdown of how your credit score is compiled, check out the chart at:
http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
This along with how aggressively you’re tackling the debt, it
Thanks for the warm welcome to the community and the information. Good stuff to know. Would you suggest rechecking your credit score after 3 months?
@ Jenna:
Sorry for my delayed responses, but here’s my take.
The companies report to the credit agencies on different intervals which could be once a month or once a quarter (3 months). For now – I’d suggest just focusing on those debt strategies and don’t worry about the score – it will work itself else. Plus, since most scores cost $$ it’s not worth those hard earned dollars! However, if you’re aching to check there are several free “estimators” out there that calculate your expected score based on a series of survey answers.
For me it is a four step process:
1. Stop taking on new debt.
2. Go into austerity mode.
3. Pay off highest interest debt.
4. Repeat until all debt is gone.
The credit score will take care of itself. To be honest I’ve never really paid attention to credit scores.
@ The Biz of Life:
Ironically, the credit score is a reflection of how well you are able to manage debt (essentially). The snowball strategy has been a tried & true method most people subscribe to nowadays.
Thanks for all the comments & welcome to the blogging community!