Your credit is your financial identity, your financial DNA, your financial resume. Your credit is one of the most important aspects of your life and it can make or break you over the course of your life. Credit affects many aspects of your life, such as applying for a job, applying for a house or apartment, or applying for a personal loan or credit. Don’t be discouraged if you have bad credit. You can restore your credit and still achieve your financial goals.
The first step in repairing credit damage is to request a copy of your credit report from the three major credit bureaus: Experian, Equifax, and TransUnion. Review your credit reports with a fine tooth comb verifying the accuracy of the following information: name, address, phone number, SSN, date of birth, current and previous address, accounts, account numbers, open and closed dates, status of the account, amount owed and payment history.
Once you’ve reviewed your credit report, determine if you have overdue accounts. If you have bad credit due to job loss, health problems, family problems, or a disability, tell the creditor right away. Call the creditor to set up a payment plan to pay off all debts. Determine the monthly amount you can pay, don’t let the creditor determine the amount for you. If the creditor offers a settlement request, the credit lists the status of the account as “paid” or “paid in full” rather than “settled” or “settled for less than full amount.” If your account is listed as “settled,” this will lower your credit score even though the account has been paid off.
If you are currently unable to pay your debts due to unemployment and financial problems, apply for a financial hardship and request a reduced monthly payment and a reduced interest rate for a period of one year. During this time you will not be charged late fees and you will be able to build your credit until your financial situation improves.
If you find errors on your credit report, write a letter to the credit bureau reporting the error or request a dispute investigation online by visiting the credit bureau’s website. Please provide any supporting documentation to prove your claim. The credit bureau will respond to your letter within 30 days from the day of receipt. Keep copies of all correspondence sent and received in case you need to refer to it in the future. If you don’t receive a response, send a letter to the credit bureau to verify that the updates were made. Request another copy of your credit report after 45 to 60 days have passed to verify that the updates have been made.
If you dispute an error and the credit reporting agency or the company that reported the error refuses to update the information on your credit report, you can write to the credit reporting agency reporting the error and request that a hundred-word statement be added to your credit report for that account. . This helps increase your chances of approval in the future.
If you have an account that has a history of late payments, you can request that the company re-age the account once you have made consecutive on-time payments over a 9-12 month period. Past due (negative) payment history will be removed from your credit report, which will increase your credit score.
Additional ways to repair damage to your credit are: keep your balances at or below 50% of the credit limit, open no more than 1 new account in a 6-month period, don’t do business with “bad credit, no problem” ” businesses, order your credit report every year, avoid foreclosure and bankruptcy, consolidate debt carefully, see a professional, don’t ignore overdue bills, and set up automatic bill pay to ensure bills are paid on time. weather.
Protect your credit as you would your life, guard it carefully. “Money can generate wealth or generate debt, you choose.”