[Image via Unsplash]It always comes as a surprise when you request a credit check and you find that your scores are far from what you expected — and not in a good way. Sure, a few times you forgot to pay the electric bill on time or missed your monthly minimum due on your credit card. As you read your credit reports, you might catch errors of your own, discrepancies between different reports, and — occasionally — glaring inaccuracies. It's not always your fault if your reported score is lower than you thought! Repairing your credit is the process of restoring the information held by the various credit bureaus to its rightful and honest state. You are legally protected from bearing the burden of these mistakes or malicious misprints. The process is not simple or quick, but with patience and attention to detail, you can have these problems corrected. Combine this approach with better financial habits moving forward, and you’ll restore your credit to the high levels you’ve earned and enjoy all of the benefits that come along with it.
People tend to forget about their FICO score until it’s too late. It’s not until they are applying for a new credit card or attempting to secure a mortgage or car loan that they realize something is amiss.Your unfortunately low score can result in one of two situations:
Let’s use simple numbers here for the sake of the example. Receiving a 9% interest rate instead of a 6% rate over the 30-year lifetime of a fixed mortgage can cost you as much as $800 extra per month depending on the size of the loan. Multiply that out and you’d have paid $288,000 more in interest than you would have otherwise.This is why you need to repair your credit now, especially if you anticipate any larger purchases in the near future. For most of us, there is simply no realistic way to purchase an entire home with cash. We must have access to lines of credit at reasonable interest rates. Don’t wait to get started.
[Image via Pexels]Before you get started, prepare yourself mentally. Understand that you may encounter gross misrepresentations of your payment history. You may find that information and events that would reflect positively on you are missing. Self-auditing your reports is possible but very time-consuming and can be additionally frustrating due to elements being out of your control. Even when you finish your part, you’ll wait weeks for a response. If you feel up to the task, keep reading along and get to work, or if you’d rather have one of the reputable credit repair companies take care of it for you, skip this section and move on to the next.
As mentioned above, you are within your rights as established by the Fair and Accurate Credit Transactions Act (FACTA) to receive your credit report free of charge once per year from each of the three main credit bureaus. Use the resources below to obtain copies of each.Free Resources:
The credit bureaus and lenders must investigate and respond within 30 days. This means you should wait at least 45 days for any mail documents to arrive. A response will contain one of two replies for each disputed item: the inaccuracies were removed or they disagree with your claim. If they disagree, do not give up. Attempt to find more documentation supporting your position and contact the reporting agency again.For any items that are successfully removed, you will be provided another copy of your updated credit report. Legally, any items changed or removed cannot be restored to the original version without proof from the information provider. The provider must also contact you first about this proof. You may also request that the credit bureaus send notices of these corrections to any potential lender that requested your report in the last six months. Another Credit Marvel Tip: If the dispute is denied because the lender believes the information they provided is accurate, you can place a statement of dispute on your credit report. This won’t change your score, but it will give you the opportunity to let future lenders know that inaccuracies exist and to consider these when determining whether to offer you credit. These statements of dispute remain on your credit report for two years. That’s it! Follow all of the steps above with patience and diligence and you’ll have done all that can be done in the credit repair side of increasing your FICO score. It’s a lot of work and takes quite a large amount of time. If you don’t want to be bothered with it, we’ve provided a list of trusted credit repair professionals below that you can consult. They can manage the entire credit repair process for you, so you don’t have to get lost in this mess of paperwork and potential headaches.
While a guide such as this one can make the process of credit repair easier, there’s no such thing as easy or quick credit restoration. The ordeal requires patience and focus to do well. Many people decide they don’t have it in them or would rather just not spend the time. And that’s perfectly fine because there are professionals who can help you out and take the burden off of your shoulders.We at Credit Marvel have narrowed down the list of professionals to include only the best credit repair companies. Please be aware that there are a lot of scams out there. You run the risk of encountering cheats who offer convenience while promising the world and give nothing in return. Protect yourself from further fraud by not straying from the professionals listed here on our site. Let the pros analyze your credit report, outline a personalized roadmap to achieving your goals, go through the dispute process with the credit bureaus, and even negotiate with your creditors to help reduce your payments and get you back on track. If the thought of working through this process gives you the slightest anxiety or makes you want to procrastinate, just hand it over to a specialist and be done with it. Credit Repair Company Reviews:
Fixing problematic items on your credit report is only the first step to maintaining and increasing your credit score. First and foremost, make sure you’re paying your bills and any loans on time so that your score will not only stay as high as it is but will also increase over time. If you encounter any future problems with debt or have debt now, immediately contact your lender to explain the issue and negotiate better terms. Many lenders will be happy to help you since it helps them as well. As you continue to use credit, try not to float a balance of more than 30% of your overall credit limit. Anything above this ratio can begin to lower your score again.Here are a few more tips for creating good credit habits.
With diligence, practice, and dedication to the task, you can fix your credit score up for the long-term. Enlist the help of your spouse and friends in budgeting your finances, and ask professionals to help you audit and correct errors on your credit report. You’ll be back to the top in no time, enjoying lower interest rates and higher credit limits and loans. Good luck!