Credit Repair
The importance of having a clean credit can be easily understood by a person who has been bankrupt or someone whose application for loan has been turned down due to bad credit. Such the crucial time when credit repair comes in to play.
What is credit repair?
Credit repair is a process of taking few steps that would increase one’s credit rating. The basics include the review of current credit history followed by filling up of required forms and letters for the correction for any inaccuracies. The credit history needs to be obtained from the three major credit bureaus for credit reporting in United States, Equifax, Experian and Trans Union. This report can be obtained without any fee every twelve months. The next step involved in the credit repair is removal of inaccuracies and error in the report. The help for the process can be obtained online from various websites. One of them being The Federal Trade Commission’s (FTC) website. Dozens of resources which can help in fixing the credit can be obtained from local libraries. Based on the circumstances repairing of credit is done.
Why should we repair bad credit?
Bad credit not only restricts an individual from getting a credit card or load but also can make him homeless or even jobless. Bad credit results in low credit scores which in turn give higher interest rates, repairing of credit will result in lower interest rates and ultimately lesser money to be paid as interest. Credit history also has an effect on the insurance premiums; bad credit history will force you to pay more premiums. Every American always dreams of homeownership. Realization of this dream is impossible with a bad credit because of very high interest rates. Also many banks refuse to lend a mortgage without repairing of credit. Bad credit not only prevents you from owning a home but can also lead to the denial of the rental application. The miseries do not end up here, your auto application can be denied without a good credit score. A bad credit history can held up your promotion and you might even end up losing your job.
What is the process of credit repair?
The process of credit repair starts after obtaining the credit report from the concerned authorities. The report that is obtained is now analyzed to figure out the damaged items of the report. The positive and negative on the credit report is identified and a rank list is prepared of the same in a hierarchical sequence with most damaging items information on the top followed by the next most damaging item. Initially you need not dispute the information within listing, repossession or an already settled account. You must save the information within listing for further round of disputes. Since bankruptcies, judgments, child support and foreclosures are very easy for the bureaus to verify electronically, it is toughest to remove them from the report in order to obtain a clean credit. It is very necessary to keep proper record of the letters sent as well as received. This might help the cause in case CRA’s fail to respond in the time frame as fixed by the law. You must document your credit repair efforts and subsequently a track of your correspondences with your credit bureaus and creditors. All the correspondences as well as the records of telephonic conversations with your creditor help in handling any special difficulty in the credit repair. After receiving the dispute letter the credit reporting agencies investigate the items. The credit bureau investigates in a time frame depending upon the dispute and solve consumer’s dispute within that stipulated time. You can ask for a corrected report in case the investigation reveals an error. Now evaluate the results of the credit repair with the documents prepared by you during the course of the repair. The process of disputing negative listing with the credit bureaus should be repeated. In case you hit on correct dispute the bureau may pull that off from the listing. You may as well try specialized technique depending on the nature of listing. Some people may find credit repair, a slow and tough process but it is not so. You just need to avoid some mistakes which include avoiding dispute with the credit bureaus, failing to document efforts and being unrealistic. With a bit of time, effort and patience a clean credit report is not hard to achieve.