This article will address the appropriate process for repairing credit. Okay – hup, two, three, four – now is the time to take charge and get your credit back in tip-top shape. For starters, “credit repair” is a term used for challenging bad credit, not items on your credit report in good standing. The process is not difficult. You simply obtain a copy of your current report from one or all of the three primary credit bureaus, review the information, and then request that changes be made to inaccuracies. Since 1997, a number of laws, practices, and regulations have been established, governing this process so consumers just like you have the opportunity to make their credit right.
If you have recently been denied credit for a home, car, boat, credit card, utilities, and so on, then you have a right by law to obtain a free copy of your report from the respective credit bureau. If not but you want to make sure your credit is accurate, you can purchase a copy of your credit report for a minimal amount. Just keep in mind that when cleaning up credit, you want to obtain a copy from all three agencies since they typically provide different information on your report.
Once you have obtained your credit reports, you need to go through, line item by line item, looking for things that are reported wrong. If doing this online, you can dispute many of the claims through an online form although some entries might need to be disputed in writing. Once the information has been submitted, you wait. However, remember that credit bureaus have 30 days in which to respond so if too much time goes by, you have laws on which to stand, demanding resolution.
Now, as mentioned, according to the Federal Fair Credit Reporting Act (FCRA) of 1997, you are entitled to a copy of your credit report for a reasonable charge but you cannot be charged under certain conditions, which include:
· You provide in writing that you are currently unemployed but will be applying for employment within 60 days
· You currently receive public welfare assistance
· You believe your file contains inaccurate information specific to fraud
· You have been denied credit, employment, or insurance within the past 60 days
· If you currently live in Colorado, Maryland, Massachusetts, New Jersey, or Vermont, a free copy of your report can be obtained once a year and if you live in Georgia, twice a year
· If you received an updated copy of your credit report in response to a dispute, which would be a challenge against a specific erroneous item
Once you have identified and addressed any inaccuracies on your credit report, you then have the responsibility of getting your credit in good shape. Credit is valuable and is the determining factor when it comes to buying things such as a home or car. Therefore, you need to take charge of what happens once inaccuracies are corrected. According to the three primary credit bureaus, the basis of good credit is having three open trade lines and 12 months of good payment history. That means if you have three credit cards, you would need to use them for 12 months but be responsible in not going over your credit limit and not paying late. You do not need to go out and load the card up to establish good credit. In fact, you can spend $5, $10, or $15, and then turn around and pay it off as soon as the statement arrives. Every time you do this, you are setting up good credit.
Another way to establish good credit is to take out a small loan, say $2,500. Many banks and credit unions will provide these loans on a signature-only basis, making them easy to get. Then, pay above the normal payment amount each month for six months. At the end of the six months, pay the entire loan off. You have a number of options when it comes to repairing and establishing credit. Just remember, when you are in the process of cleaning up your credit report, you will need to put on your armor and be ready for battle. Although the process is smooth for some people, it can be challenging for others so be prepared.
