There’s a number of ways to fix bad credit and true credit repair involves more than just sending dispute letters. So be beware. Many repair agencies offer little beyond disputing negative information. The problem with these compnaies is that they’ll often dispute just about anything–even if it is 100% valid.
Why it’s Dangerous to Dispute Valid Information
The reason disputing valid information is so dangerous is because it’s illegal. Of course, you do have the right to dispute anything on your report that you feel is inaccurate or incomplete, but disputing something you know is valid can make your problems worse-and it can even result in a lawsuit. So why take chances? There is a better, safer approach to credit repair.
Fix Your Credit in 5 Easy Steps
Step One: Make a Budget
Budgeting your money may be one of the most important parts of te repair process. Although it is possible to resolve some of your credit problems without a budget, you’re most likely going to have to start saving money and planning for future expenses. For example, paying off your debts and collection accounts will often require lump sums of money. So before you begin addressing all of those credit report issues, be sure you’re spending money appropriately and preparing for the future.
Step Two: Analyze Your Credit Report
If you’re going to start the repair process, you’ll need to know exactly what’s listed on your credit report. Every year, you’re entitled to a free copy of your credit report from each one of the three major credit bureaus (TransUnion, Equifax and Experian). A careful examination of your credit report will also reveal potential errors or suspicious information that you may want to have investigated.
Step Three: Make Corrections to Your Credit Report
There are many reasons to have your credit report verified. If you see anything on your report that you feel is inaccurate, it’s probably a good idea to send a verification (or dispute)letter to have it corrected or removed. Even a mistake that seems minor can have a great impact on your credit score. Checking your report for errors is an essential part of credit repair.
Step Four: Negotiate Debt Settlements
If you have been budgeting your income up to this point, reducing your debt and finally paying it off should be relatively simple. Collection agencies are often willing to agree to a debt settlement. Debt settlements are the best way to have your debts reduced to an amount you can actually afford to pay. Be aware that credit repair certainly requires more than making corrections to your credit report. After all, one of the most damaging things to have on your credit is unpaid debt. And when dispute letters fail to satisfy your unpaid debt, you’re going to have to take a different approach to resolve these kinds of issues.
Step Five: Establish New Lines of Credit
It’s possible to get approved for new, positive lines of credit–regardless of your credit history. Once your finances are under control, your credit report has been verified, and your debt has been paid down, you’ll be in a good position to establish new credit. Establishing new lines is credit is one of the very best ways to increase your credit score.
While credit repair may be challenging, it’s very possible–and its rewards are plenty. It is not always the fastest process-it will, of course, take some time to correspond with credit bureaus and collection agencies and you’ll probably have to save some money in order to pay off your debt-but it’s usually a sure and safe process. Following these five steps, you’ll see just how easy it can be to fix bad credit.