What Can I Do to Repair My Credit?
Premise of Repair
As all scoring systems are automatic, your total will rise as soon as the mistakes vanish. You must understand that only erroneous reports may be changed. If a derogatory is a fact, it will remain on your records for years — usually, seven. Bankruptcies may tarnish the status for a decade depending on the chapter filed.
Correction requires several steps. First, you need to obtain the data from all three agencies and pore over it. After finding the mistakes, you should collect sufficient evidence to prove them. Finally, you will communicate with the bureaus in writing to have the errors deleted.
The complexity of the process prompts many Americans to opt for professional credit repair. Check reviews of the best credit repair services in your state to see how this works. Professionals can save you a lot of time and prevent re-disputes.
Do not expect an overnight boost, though. Every dispute claim is investigated within 30 days. Afterward, the bureau accepts or rejects it. You may also be asked for additional proof, which delays removal. Find out more about the average total duration in different cases. Here are the key stages regardless of complexity.
1. Obtain Your Reports
Collecting the records is a breeze, and you can always check your credit score through mobile apps like Credit Karma. To download the documents from all three bureaus, visit www.annualcreditreport.com and submit a request. Only basic information is required, and the result is immediate.
Alternatively, you could contact the organization by phone or send a written request. In this case, the data will be provided within 15 days. With the full reports on hand, you can proceed to the next stage — meticulous analysis.
Note that looking through all the records is essential. Each lender may share information with a specific agency. Any of the histories may be wrong. It means you may need to open disputes with one, two, or all three bureaus.
2. Scrutinize Your Histories
Look through all versions of your borrowing history carefully. Go line by line, checking all the figures and details. Mistakes range from wrong spelling to false events. You may even see a bankruptcy that never happened! Print out the reports and mark any inconsistencies.
3. Gather Evidence
For a mistake to be removed, it must be proved — contact your lender to collect sufficient information. Bank statements and other documents should make your claim persuasive. Upon receiving your request, the bureau will still communicate with the lender, but you have to include the evidence in your claim.
This stage is crucial. If the bureau finds your proof incomplete, it may request more information. Considering the length of every investigation (30 days), this will delay repair considerably. Consumers who use credit repair services have all the evidence collected for them. Professionals also send debt validation letters on their behalf. These oblige the lenders to prove their clients owe the amounts reported.
4. Open Disputes
The Consumer Financial Protection Bureau offers free guidance, and you can find free templates of dispute letters on its site. Formal correspondence must be sent by certified mail with a return receipt. This will provide hard evidence of communication.
Knowing when your letter was received, you can understand when to expect a reply. In some cases, the investigation is extended from 30 to 45 days. Eventually, if the corrections are accepted, the bureau will mail you a copy of the revised report. This does not count as your free annual copy.
Experts recommend covering 3-4 errors in every letter. As you can see, repair may take months. The more often you check your credit reports — the easier it is to fix them. Hiring a repair firm will also speed up the process. Industry experts know which derogatories to target first and what evidence to collect. They will do everything on their behalf while you simply monitor the progress using a portal or an app.
When the Score Is Correct
So, what can be done if the score is perfectly fair? When it falls due to your own irresponsible behavior, the only remedy is changing your habits. The bureau will never remove any missed or late payments that are legit. However, there are several methods to try. For the best results, use them all simultaneously.
1. Credit Utilization Ratio
Credit utilization reflects the use of available limits. It only applies to forms of revolving credit — i.e., credit cards. The lower the indicator — the better. Experts recommend keeping it under 11%.
To establish your utilization, divide all the current balances by the limits. For instance, if you have four credit cards with a total limit of $10,000, and you have used $4,000, the ratio equals 40%, which is too high. To bring it down, you could pay off the balances (at least, partly). Achieving the target utilization of 10% would require a total balance of $400.
Alternatively, request a limit increase. This will achieve a similar result. However, in our example, the size of your available credit would have to expand to $40,000, which is hardly realistic. So, extend the limits and pay off the balances at the same time.
Finally, getting a new credit card is also helpful. If you do not qualify for a standard product, get a secured one instead. As it requires a deposit, lenders will be more willing to issue it.
2. Adding More Data
One of the bureaus allows consumers to include more information in their reports. Through Experian Boost, you could add utility bills and other payments — even your Netflix subscription — to gain a few points. According to the bureau, 10 is the average result.
Final Words
To raise the credit score, you need to understand if it is fair. According to statistics, 20% of Americans have one or more mistakes on their records. Open disputes to remove verifiable mistakes, and rebuild your history if it is accurate.
Combine different methods for quicker results. If you want to avoid the hassle of complex repair, hire a team of professionals and delegate the job. It is the most convenient and efficient approach. Choose your provider based on BBB ratings, customer reviews, and expert opinions. All of this information is easily accessible online.
