In 2003 congress passed an important amendment to the Fair Credit Reporting Act. The amendment, known as FACTA, required Equifax, Experian, and TransUnion to provide consumers with a free credit report, upon request, once every 12 months. This was meant to encourage consumers to examine their credit reports for errors. FACTA put a significant burden on the credit bureaus, and for good reason; 50% of all credit reports contain errors severe enough to cause consumers to pay premium interest rates on loans or even to be denied outright. This is a serious problem.
Getting Your Credit Reports
The website set up for the purpose of dispensing free credit reports to consumers is annualcreditreport.com, and is actually a hub that requires you to maneuver through three different sites. At each step you will face security questions which can bring your efforts to a standstill. It’s not easy, but it’s free! If you don’t have the patience I suggest you visit any of the bureau websites and purchase a tri-merged report. It will include all the information you need and should cost about fifteen dollars; easy as pie. Just make sure you don’t accidently signup for monthly monitoring or any of the many add-on services they peddle – unless you want to!
Should You Get Your Credit Scores?
In the long run credit repair is about credit scores. If you know your scores at the outset of your credit repair effort you will have a benchmark to monitor your progress. And so goes the logic, but it is easier said than done. The credit scores sold by the credit bureaus are not the same scores used by lenders when underwriting loan requests. Lenders use a score model known as FICO (an acronym for Fair Isaac & Company, the developer of the score). The credit bureaus sell FICO scores to lenders, but not to consumers. The scores sold on the bureau websites are “estimated scores” and can differ by up to 100 points from your FICO scores. Ouch. If you want to monitor your FICO scores you can purchase them at myfico.com. It will cost you about $50 for all three. You can decide if it’s worth it.
Organizing Your Credit Repair Effort is No Joke
If you are going to manage your own credit repair effort you want to get organized, really organized. Each credit bureau maintains unique information about you. The errors you find on one bureau may not be on the other two. In addition, the same account will often report with a different name and account number on each bureau. If you want to maximize the probability of success you must address each error individually with the offending bureau. I suggest you get three file folders to organize your efforts and plan on treating each credit bureau dispute effort as a separate project.
A Complete Examination
Once you are organized it’s time to get to work. Remember to deal with each bureau individually. If you got your credit reports for free you already have three separate reports. If you purchased a tri-merged report at one of the bureau sites you need to make copies so you have one for each of your three file folders. Start at the top of the first report and don’t skip a line even if you don’t spot an obvious problem. Truly effective credit repair is not just about finding the obvious derogatory issues (although they count too). There are lots of tricky little things to look for. Every point on your credit score matters. Let’s put in the effort!
The Credit Repair Hunt is On
Think of your credit repair effort as a treasure hunt. I bet you can find some credit repair gold, if you look carefully. Here are some of the little items that can add up to serious points on your credit score: underreported high credit limits on your revolving accounts, misreported start dates, balances on closed accounts, and duplicate accounts. Want more? If you have authorized user accounts with derogatory information or excessive balances they are hurting your score; make a call and get removed from the account. Oh, and a note on collections. If a collector no longer owns the debt they are not allowed to report the collection. Collectors sell accounts frequently, but the system does not provide any incentive for them to cease reporting. It’s up to you.
Consider a Credit Repair Professional
Your credit score will determine the cost of your mortgage, your auto loan, your credit cards, and more. Your credit score can even affect your employment and the cost of your property insurance. If you don’t have the time to take care of your own credit repair efforts, hire a pro! A credit repair professional will make sure that everything possible is done to clean up your reports and optimize your credit scores. Time is money, and if you already have a full schedule, don’t put off the task. Find a reputable credit repair service and put them to work for you!
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