Repair Your Credit

If you are in a bad credit situation with high debt and a low credit score, you repair with a few do-it-yourself steps. Your first step should be to obtain a copy of your credit report. I must caution you here, many scams are floating around the net about free credit reports. You can get your credit report free once a year but at ONLY one site. See The Truth About Free Credit Reports for the facts before you request your fee report.

Once you review the report, challenge every item you are not sure about. Notify the three credit bureaus by certified mail of each erroneous entry:

Mail disbutes to all three bureaus by certified mail:

TransUnion
P.O. Box 1000
Chester, PA 19022
1-800-888-4213

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
1-800-997-2493

Experian
P.O. Box 2104
Allen, TX 75013-2104
1-888-397-3742

Sample Letter

Today's Date
Your Full Name
Your Complete Address

Complaint Department
One of the three credit bureaus
Their complete address

To Whom It May Concern,

I am disputing the following items in my credit history. Attached is a copy of my report which I have circled the items I am disputing.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing.)

If they have ruled in your favor, check your credit report again to be sure that the error has been removed. Even small corrections can help toward increasing your credit score.

Now that your report is in order here comes the hard part. No one wants to hear this but you need to start paying down any accumulated credit card and loan balances. Use the snow ball effect. By that I mean pay off the smallest balance first. Then take that payment amount and apply that to the next highest. Rinse and repeat. Eventually you will make your way to the dreaded car payment and, yes, even the mortgage. It's very important that you pay on time every time and keep up to date every payment you have.< br/>< br/> Note: Many credit counselors, which I am not, recommend you pay down debt beginning with the highest interest rates. While this makes perfect since, in my experience, going smallest to largest is easier and has a better success rate.

The next step when you are trying to is to stop charging! I'm sorry, but if you can't afford it then there should only be three options available. They are:< /br>

Ready for another step or are you too mad now? Cancel any zero balance credit cards and open charge account such as line's of credit. These 'available' credit balances lower your score as well. It's not good enough to just 'cut up' the card. They must be canceled at the credit card company.

You can also try a credit counseling center to help you repair your credit if things are simply too out of control. Notice I said 'credit counseling' and not 'credit repair'. Avoid those credit repair companies that re-negotiate terms unless you are trying to avoid bankruptcy. Things need to be pretty bad for this to be an option to consider.

None of these steps will work if you don't have complete control of your current finances. This includes making a budget and sticking to it. Keep your checkbook balanced and don't by a cup of coffee unless it was budgeted in. Keep track of every penny spent by creating a 'spending log' in a cheap pocket notebook. If you are married with a family everyone has to be on board.

Taking steps right now to is, in the long run, less about being credit worthy and more about your financial piece of mind!

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