Do-It-Yourself Credit Repair-Step One:When looking at the task of improving your credit score it is easy to get frustrated and think, "where do I start?" When you slow down and concentrate on the task at hand there is only one logical place to begin; you need to determine where you are.
The first step to improving your credit is to get a copy of your credit report. There are numerous ways to get one. If you are turned down for credit based on information contained in your report the Fair Credit Reporting Act (FCRA) states that you have the right to receive a free copy of your report if you submit a request, in writing, within 60 days.
The fastest and easiest way to get a copy of your report is to purchase one online. They can be found cheaply all over the Internet. Since there are three major credit reporting agencies (and they don’t share information), you need to get a copy of your report from each agency. You can order a 3-BUREAU CREDIT REPORT from CreditReporting.com for $34.90. 
When you receive your credit report you are ready to move onto step two…
Do-It-Yourself Credit Repair-Step Two:
After you receive your three-bureau credit report you need to check it for inaccuracies. It has been estimated that over seventy percent of credit reports contain inaccuracies.
The first thing you will look for are any accounts that you don’t recall opening. This is a sure sign of credit fraud or identity theft. These are two crimes that are rapidly on the rise in the United States. The ease of information gathering has allowed this type of activity to run rampant.
After checking for unknown accounts you want to verify that the information contained regarding the other accounts are correct. Look at the balances, the payment history, credit limit, and account status. Any of these items that are incorrect must be fixed.
According to the Fair Credit Reporting Act if any information in your report is inaccurate or incomplete you have the right to dispute it. Upon receipt of your dispute the credit reporting agency has thirty days to either verify it’s accuracy or remove the item from your report.
In order to dispute items on your report you should send a letter to the reporting agency with the incorrect information. Their addresses are listed below:
Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
Experian
PO Box 9595
Allen, TX 75013
Trans Union
2 Baldwin Place
P.O. Box 1000
Chester, PA 19022
With your letter you need to include the following:
- Your full name
- Your complete mailing address
- Your date of birth
- Your Social Security Number
- The name and account number of the creditor and item in question
- The reason for your disagreement with the disputed item
- A copy of your driver’s license or state issued identification
- Proof of your address, such as a copy of your utility bill.
- Your signature
You letter should not be too specific when disputing an item. A simple explanation such as "This account is not mine" or "The payment history on this account is inaccurate" will suffice.
When you send your dispute letters you should send them via certified mail with return receipt. Since the credit reporting agency has only thirty days to verify the accuracy of your account you want to be able to prove when they received your request.
Sample Dispute Letter:
Date:
Your Name
Your Address
Your City, State, Zip Code
Social Security Number
Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code
Dear Sirs,
I am writing to dispute the following information in my file. The items I
dispute are also circled on the attached copy of the report I received.
(Identify item by creditor name and account number): The payment history on this account is inaccurate. To the best of my knowledge the account was never paid late.
(Identify item by creditor name and account number): This item does not belong to me.
Please investigate these items and contact me with your results. If my credit report is changed as a result if this investigation, please forward an updated report to my home address.
Sincerely,
Your name
Your signature
Enclosures: (List what you are enclosing)
You should also check your report for old items that should be removed. For the most part, late payments, collection accounts, charge offs, foreclosures, repossessions, paid tax liens, lawsuits and judgements should be removed seven years after the last activity on the account. If you have any items older than this you should send an additional dispute letter.
Sample Letter to Request Outdated Material:
Date:
Your Name
Your Address
Your City, State, Zip Code
Social Security Number
Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code
Dear Sirs,
According to the Fair Credit Reporting Act the following item(s) should be removed from my credit file as they have exceeded the seven-year reporting period.
Identify each item by creditor name and account number.
After these items have been deleted please forward an updated copy of my credit report to me.
Thank you,
Your name
Your signature
Enclosures: (List what you are enclosing)
This letter should include the same items that were listed for your sample dispute letter.
It is very important to remember that you only want to dispute negative items. Under no circumstances should you file a dispute for accounts in good standing, no matter how old they are.
Now that your dispute letters are in the mail you can move on to step three.
Do-It-Yourself Credit Repair-Step Three:
Now that you’ve received a copy of your credit report and sent dispute letters to the credit agencies your report should be looking a little better. Now comes a section that can make a tremendous difference in your credit score, as well as reduce the amount of debt you have outstanding.
It is now time to send settlement letters to your creditors. You want to try to reduce the amount of your balance and have the creditor either delete their account from your report or change their account to a positive status. This will take some negotiating.
When settling with a creditor the effect on your report is just as important as reducing the level of your debt. A seriously delinquent account that is paid off well after due still has a serious negative effect on your credit score.
A sample settlement letter:
Date:
Your Name
Your Address
Your City, State, Zip Code
Collection Manager
Company Name
Address
City, State Zip
Dear Collection Manager,
It has been brought to my attention through the credit reporting agencies that you claim I owe a debt to your company. While this debt has not been verified as legitimate to me I am willing to make a settlement that is beneficial to both parties.
My offer is found below. It is not a promise to pay any debt, and it does not constitute any agreement unless it is signed by an authorized member of your company and returned to me.
Upon receipt of this signed settlement I will make payment of $XXX.XX to your company in settlement in whole of this account. On receipt of my payment you agree to change the status of my account with all credit reporting agencies to "Pays as Agreed" or eliminate the item from my credit report completely.
If you agree to these terms please sign this form and return it to me. By signing this form you acknowledge that you are authorized to enter into such an agreement. If this form is not returned to me no further agreement will be made, and I will request full verification of this debt in court.
Name of Creditor:
Printed Name of Signer:
Signature:
Date Signed:
Sincerely,
Name
Social security number
You do NOT want to sign this form. Upon receipt from the creditor you must send payment to the creditor. After making payment you should send another dispute letter to the credit agencies including proof of payment for this item.
Don’t be afraid to get creative with this step. If you owe a company $250.00 tell them you’ll make five weekly payments of $50.00 each. Just make sure you get them to change the status of your account. The worst that can happen is the creditor will say no! If they do, try one more settlement, then request detailed information regarding the debt.
This should be done for all negative accounts that can not be removed from your report through disputes to the reporting agency. After settlements have been made with each remaining creditor you can move on to step four.
Do-It-Yourself Credit Repair-Step Four:
Now that you have reviewed your three-bureau credit report, disputed inaccurate items and attempted to make settlements with your creditors you are ready for the final and most rewarding step. You need to begin rebuilding your credit.
For many people this is the hardest step. They were able to write letters and follow up on them. But receiving new credit is out of your hands. Fortunately, with the steps you’ve taken it should be fairly easy to reestablish yourself.
When applying for credit you want to make sure that the creditor will report your positive history to the agencies. Major credit cards are the best for this, but department stores will also report credit history on a fairly regular basis.
There are several areas online that you can go to search for new credit. My favorite site is CardOffers.com
. This site allows you to enter your search criteria, such as the type of card you are looking for, the APR and annual fee you will accept, and whether or not you’ll accept a secured card, and gives you a listing of major credit cards that will suit your needs.
For a small fee First United Group
guarantees to find a bank that will issue you a Visa or MasterCard.
Summary
You’ve gone through all the hard work of acquiring your credit report, disputing incomplete and inaccurate items, settling with your creditors and reapplying for new credit. By now your score should be greatly increased.
If you need further help you should try one of the more in-depth credit repair resources available. One of the best is the Credit Repair Kit
. This kit was developed with approximately 10 years of research and experience in the field of credit improvement and sells for only $39.95.
Please feel free to email me at
dfarrands@hotmail.com to let me know what you think of this eBook, and the results that you receive. I appreciate all the constructive criticism I receive.I intend to make numerous other financial resources available for free. Please take the time to visit my website at
http://diverse-knowledge.netfirms.com