How to Effectively Repair Credit over Time
There are several stages when it comes to asap credit repair. Consumers with credit problems must go through each stage in order to determine their best options. Each aspect of credit repair will be explained below to help consumers get the proper help required to be on the road to recovery.
Annually, consumers are entitled to a free credit report or free credit score from the credit reporting agencies. Request a report from the credit reporting agencies directly or request the reports through a third party credit report provider. The consumers should view the free credit report from all three agencies: Experian, Equifax, and Trans Union. Then, examine the report for errors.
If there are errors, dispute the errors via the online dispute form or hire an attorney to assist with the dispute process. Attorneys are aware of tactics that will have items removed from the report. They will write letters to each of the three credit reporting agencies and request that the items are removed from the report. If the creditors do not respond in 30 days, the disputed items will be automatically removed from the report.
Those items that are not errors can be negotiated to a reduced amount. Often when a debt goes to collections, companies are just happy to receive a portion of the debt back. Therefore, they will negotiate the debt to an amount lower than the amount owed. Many people have gotten their debt owed reduced by 70 percent or more. This makes an incredible difference if the consumer owes a considerable debt.
Attorneys are skilled in this category and can help consumers reduce their debt. The only problem is that attorneys cost money. Most people in debt cannot afford an attorney. Consumers should seek an attorney that will only seek payment if the item is negotiated down and removed from the credit report.
Pay off the negotiated debt according to the payment schedule or sooner. Once the account is paid off, the law states that after a certain amount of years, the negative item may be removed from the report. The number of years may vary, but the time period is typically seven years. If an item has not been removed in seven years, consumers should request that the item be removed from the report.
After each of the items is removed and paid off, consumers should start to apply for secured credit cards to improve their credit. These credit cards require a security deposit that is typically equal to the credit limit on the card. Consumers will enjoy the benefits of an unsecured credit card including some of the travel benefits and merchandise protection.
If consumers pay the bill on time for 12 months, they can typically apply and receive a secured credit card at the end of the period. Secured credit cards show lenders and merchants that you are fiscally responsible again, and you can handle the responsibility of an unsecured credit card. If the consumer makes a late payment, a fee will be assessed and the interest rate will increase. The incident will be filed on the credit report, and the individual’s credit score will be reduced again.
Credit repair is essential for people that have suffered unfortunate incidents in their lives that affected their credit. Consumers need to pursue resources that will help them restore their credit in the short term. Credit repair will help people improve their lifestyles and purchasing power.