Area of Law:
If you have recently filed for bankruptcy or if you have bad credit, you may have questions about how to start your credit repair. Credit repair can be confusing and it is easy to misunderstand what you should do each month to repair your credit. However, follow a few steps to get started repairing your credit today.
First, request copies of your credit report from the three national credit bureaus: Equifax, Experian, and TransUnion. By law, these 3 credit bureaus must provide you with a free credit report every 12 months. Visit http://www.annualcreditreport.com to order a free credit report from one or all three of these agencies.
Many times you may find a mistake in one of the reports. If you find a mistake, notify the credit bureau in writing about what you believe to be the discrepancy. In addition, send copies of all applicable documents that you have related to the charge. Use certified mail to send the letter, and keep a copy of all documents, including the letter, that you send to the credit bureau. For example, if you have paid off a credit card but it is appearing as delinquent on your credit report, request the credit bureau to make the necessary corrections. Usually, the credit bureau will investigate your claim within 30 days. After the claim is investigated, the agency will notify you of any changes that were made to your credit report. In addition, the credit bureau must provide you with a free copy of an updated version of your credit report reflecting the changes.
After you have verified that your credit report is accurate, you can begin to make changes to your credit score. For example, pay as much as you can toward your debt each month. Begin by repaying your credit card with the highest interest rate first. After you repay any debt owed on the first card, do the same thing with the next card. Once you are done repaying your cards, do not cancel the card. Cancelling the card will cause your credit score to go down due to the reduction in available credit you will have following the closing of a credit card.
In addition, start your credit repair by applying for a secured credit card, available through most major banks. A secured credit card is a great way to begin your credit repair and most banks will approve you for a secured credit card no matter your credit history. A secured credit card is secured by a down payment in cash that you provide to the bank. The down payment for a secured credit card usually equals the limit of the card. Therefore, if you do not pay your bill on time, the bank can use the down payment to reimburse itself for any money that you charged to the card. If you pay your secured credit card payment on time each month, the bank may offer you an unsecured credit card after you develop a payment history with them.
If you have additional questions about how to begin your credit repair, visit the Federal Trade Commission’s website, http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm, for facts regarding credit repair.