The first step to improving a severely damaged or poor credit score is to formulate a concrete financial goal that improving your score will help you accomplish. This goal can be anything from a simple desire to have acceptable credit because the higher score will increase your personal financial power to a desire to get a good rate on a car, boat, or home loan.
After establishing your goal, you must commit to doing whatever it takes to put yourself on the road to financial freedom. This is important because the task of cleaning up damaged credit can be arduous and protracted. It is essential to be focused so as not to lose sight of the future benefit that the immediate frustration and irritation will garner for you.
In order to improve your score you must be aware of your score and aware of what positive and negative details your report contains. You are allowed by law to receive a free copy of your report once per year, but you will have to access your report many more times than this during the year you begin repairing your credit. Several websites offer unlimited views of your report for a low monthly or sometimes annual charge. You can stop this charge at any time you wish to stop having unlimited and immediate access to your report. I was reluctant to do this, but realized that I needed to spend this money in order to reach my goal. A couple of the best sites are www.bestcreditreports.com , www.truecredit.com , www.freecreditreport.com .
Once you've accessed your report from all three credit bureaus, you need to make a personal decision as to how you want to go about improving your score. You can send a dispute letter to the credit bureau regarding anything on your report that you do not agree with. The Bureau is required to notify the credit grantor and ask them to investigate your dispute. The credit grantor must reply to the Bureau within 30 days or the item must be removed from your report. This process of writing dispute letters and following up with the credit bureau can be incredibly time consuming and frustrating. Credit bureaus are notorious for having little or no respect for the concerns of the average consumer. However, if you have the time, energy, and drive to hammer away at the bureaus yourself it can be done.
In my situation, I work full time, have several children and a personal life that I am not willing to abdicate to the credit gods. I chose to subscribe to a service that will do these things for me. If you choose this route, I cannot stress enough how careful you must be when choosing a service. I called several local banks and mortgage brokers, told them about my pathetic credit score and asked them if they could recommend a reliable, affordable service to assist me with my task.
I chose a company called Lexington Law because they were recommended by several of the mortgage brokers. While the monthly cost seemed high with the limited funds I had at the time, I bit the bullet and paid the fees. They sent all the disputes for me as well as investigation requests to all three credit bureaus, kept in constant contact with me, and assigned me a personal paralegal who was in charge of my account. They did not ask for money up front. They took my information, began the dispute process to my satisfaction, and then I began the monthly fee process. Lexington Law is just one of the many safe and reliable services out there to help you correct past indiscretions and financial faux pas. Another service is CreditMor . I don't have first hand experience with them, but they were on the list of recommendations I got from some of the brokers I consulted.
Be wary of any service that promises a quick credit fix and requires money up front before they will help you. These services are often scams or outright illegal. Some services will help you get an EIN so that you can use that number in lieu of your social security number to begin a new credit history. This is a felony and the odds of getting caught are high. Other services ask for a fee up front and simply send you a list of information regarding your right to see your report, your right to dispute items on your report, and addresses to credit bureaus.
Going about fixing your credit the long and hard way is the best way. It is legal, you will feel good about your accomplishment and you will be less likely to fall into a credit trap similar to your past if you have been directly involved in improving your score. My score was literally almost as low as it could possibly go. There were many old and inaccurate items on my report as well as items that were not blatantly inaccurate, but were unverifiable. These things were removed with the help of my credit improvement service. I was also given advice as to how to further improve my score and how to avoid damaging it in the future.
In summary, if you want a home loan or a new car loan, you need good credit. It is possible to obtain a loan with bad credit, but you will end up with a much higher rate that necessary, pay much higher payments, and put yourself at risk once again for ruining your credit further. Be brave, be strong, be commited, and take control of your financial future.
