The content of your credit report can have an enormous impact on the quality of your life. Your credit score will determine the cost of your mortgage, your automobile payments, and your credit cards. An improvement in your credit score could potentially save you thousands of dollars per year.
Overcoming Your Fear
It is normal to experience a degree of fear when the time comes to look at your credit report. Perhaps you have had some credit issues in the past. No one likes to be reminded of those times. I have spoken to thousands of people about credit repair over the years. The majority of those people have felt some resistance to looking at their own reports. I understand! The credit bureaus can be intimidating. But like so many other things in life, once you get started it’s not so bad.
Reviewing, repairing, and maintaining your credit is not complicated. The key is to approach the project in an organized manner. You have three credit reports. They must each be examined in detail. Many people make the mistake of looking only for obvious derogatory information like late payments or collections. Every item on your credit report can have an impact on your credit score. You will be looking at everything. I suggest that you have a pen and paper nearby. You will also need to have your credit cards handy.
Step by Step
Everyone has his or her own way of organizing a task. You will develop a system of your own over time. Whatever works for you is fine as long as you cover all of the essential categories of information that can impact your credit scores. These essential categories are the account opening dates, current balances, high credit limits, and pay history. As you review these items keep any eye out for errors such as accounts that don’t belong to you, accounts referencing an incorrect Social Security number or address, and duplicate accounts.
The Essential Details
Account opening dates, current balance, and high credit limit need to be examined carefully. The FICO scoring formula places great importance on these items. Your account opening dates are used in the FICO formula to determine the age of your credit. The older the better. Simply look at your credit card. Most credit cards indicate the original opening date somewhere on the face of the card. The relationship between your current balance and your high credit limit has a major impact on your score. If you don’t know these numbers just call the toll free number on the back of your card. Please don’t ignore this step.
Write Down Every Single Error
Make notes. Credit repair is all about the details. Don’t let a thing slip by. And please don’t ever assume that the credit report is correct. If you find a discrepancy chances are that you are correct. Every one of the categories listed above can have an impact on your credit scores. No error should be ignored. You might think a small innocent looking error like a duplicate account will not have a negative impact as long as there are no late payments showing. You would be wrong. The extra account will overstate your debt and may very well factor into the FICO scoring method to your detriment.
Organizing Your Disputes
Each error that you find on your credit report will need to be disputed with the individual bureau that is reporting the item in question. Your credit report will come with instructions for submitting your dispute. You should follow those instructions carefully. And, whatever you do, keep it simple. It is important to limit your verbiage to the bare minimum. If you make the mistake of writing a nice letter to the credit bureau, as well meaning as you might be, your dispute is likely to be ignored. It does not sound friendly, but please try to understand that the credit bureaus have to process an amazing amount of mail.
Stay the Course
About thirty days after your initial disputes you will receive replies from the individual credit bureaus. It is not uncommon to get an unsatisfactory answer. They might respond by indicating that they contacted the creditor who verified the information to be correct. Don’t be discouraged. This initial response is built into the system. Simply send a second dispute telling the bureau that you are not satisfied with their response and that you would like them to provide documentation. It is very likely that you will get satisfaction on this second dispute. The credit repair process can take time, but with patience your efforts will produce real financial results as well as the satisfaction of knowing that you have done the right thing for yourself.