Paying back your debt and improve your credit score are two different things. You need to learn the difference between these if you want to improve your finance, you need to take some measures while repaying your debt to make sure your effort doesn’t go to waste.
Why Repair Your Credit?
Credit repair is important for saving some money for a credit card, insurance, and loans. But these three are not the only reasons why you should improve your credit score. A good credit score helps you to apply for a better job, raise, and promotion.
If you want to start your own business, or need security, you can easily borrow money from a lender at a low-interest rate. Therefore, having a better credit score helps you improve your professional life.
Trying to Do It Yourself
There are a ton of ads about credit repair companies. The hard truth is, these companies are not a miracle worker, and they won’t do anything you can’t do yourself. They are not paying the loan on your behalf. You are paying the money in the end, plus you are paying the company for helping you out.
All they do is get you back on the track, improve your financial habits. They create a budget for you and make your debt a priority. They help you make your payments on time and help you accept some hard truth.
Check the Credit Report for Mistakes
Once you have your hands on your credit report, you need to review with great care. There is a lot to digest so you should prepare yourself. You have to take your time to review the documents
Reading the Report
You need to learn about every bit of info present in the credit report. All of them are very similar even if you have requested them from different bureaus. Every report has your personal info detail history of accounts, and items that are given on public record including bankruptcy, and such inquiries.
The Weak Link
Following are the types of information that needs your special attention:
- Bad information including accounts which doesn’t belong to you, payments that are mistakenly reported late, and other things
- Past accounts which are late, charged off or sent to some collection
- Max out accounts which are over limit
You need to use color-coded highlighted for a different type of info to help you construct a credit repair plan. You need a different approach for bad info. Using color-coded highlighters will save time when you read credit reports and need to make a payment, sending a letter or calling your creditor.
Dispute over Errors
Go online to the site, take a screenshot as proof, and send by regular mail. Send evident which supports your claim. Keep a copy of dispute letter and send via certified mail with return receipt request. Be patient because it can take the bureau a month to investigate your report.
Attach a copy of credit report with your mail, attach only a copy, not the original one.