You know what I’m talking about because you’ve said that before. You know your credit score is low, but you shrug it off like there is nothing you can do to fix bad credit anyway. Well, if you think that, chances are, you’re right! There isn’t a lot you can do about it because you’ve given up already. Hey, it’s your life. Do what you want with it! But if hearing that makes you mad, read on.
You can get through life with bad credit. You probably rent, and you probably were required to put down a bigger deposit to get the place. You may have a credit card, and if so, your interest rate is probably too high. You only fantasize of buying that new car, but you’ve resigned knowing it just won’t happen. It doesn’t have to be like this. Instead of feeling bad about your financial situation, take control of it one small step at a time.
First, start by going online and pulling your own credit report. Each year, from Annual Credit Report, you have the right to run one free credit report from each of the credit bureaus: Experian, Equifax and Transunion. (Actually, that ends up being three free reports. ) I would suggest only running one at first until you have some understanding of how to review a credit report. Please know that running your own credit report will not lower your score if you use this site. And, unfortunately, they will not give you your score unless you choose to pay extra. However, the score can wait too. So which credit bureau should you run then? Experian, Equifax or Transunion? Flip a coin. It doesn’t matter at this point. All that matters is that you’re getting started by looking at a copy of your current credit report.
Second, review that report. I know, if you haven’t seen one before or it’s been a long time, it may look foreign to you. Keep looking, and try to decipher where the credit cards are listed, where the other loans are located, where any public records are shown and lastly where the recent inquiries can be found.
Third, get out your credit card statement and any loan or mortgage statements that you have.
– Double check your current credit card and loan limits.
– Check your current balances. Are they accurately listed?
– Look to see if the credit cards or loans show late payments?
– If you see late payments, we’re you in fact late or is this information incorrect?
– Do you see any credit cards or loans that aren’t even yours?
Next, take a look at the inquiries, who has been running your credit lately? Do you know these companies who’ve run your credit? If not, you need to figure out who and why they are. Sometimes, you can see a phone number listed. It couldn’t hurt to give them a call and ask some questions that may jog your memory. Often times your current credit card companies or cell phone carrier will run your credit for special promotion or to check up on you.
Then, you may see public records. This section shows judgements, liens, collections and any other matter that has been recorded against you. Medical bill collections are often found in this section. If you don’t have any of these type of items reported on your report, you won’t see this section at all.
Reviewing your own credit report really is the first step to fixing bad credit. Now, you know what is there. You still may be confused and understand exactly what everything on your credit report means, but that’s OK. You may see items on your credit report that don’t belong to you, and that is enough to get anyone fired up. You have to dispute those items. Second, if you have a lot of late payments, credit limits are missing or incorrect and you see old public record derogatory items, it will be worth your time, energy and or money to invest in fixing your report. Just cleaning up these items alone should show a significant increase in your score.
Chances are since you’ve been avoiding your credit report in the first place, you won’t know how to fix your bad credit by yourself. Even if you did, doing it alone requires a lot of time and follow up. I suggest researching a company that will help you increase your credit score. Look for a company that will help educate you along the way. Look for a credit repair company that doesn’t charge thousands of dollars, but don’t skimp and go with a company that charges under $50 either (they may keep up-charging you for different services or charge for each derogatory item). Check out their rating on the BBB. Do just a little bit of homework.
Take the leap with a credit repair company, or start to dispute items yourself from the website at Annual Credit Report (ACR). A credit repair company, most of the time, will dispute items via letter and regular mail. Disputing items yourself though ACR are done online. Personally, I like hitting the bureaus with disputes by mail. Simply because a real person has to open your mail and process that request. We all know humans can make errors, and they are only allowed to work so many hours in the day. If the credit bureaus cannot respond to the dispute within 30 or sometimes 45 days, that item can come off your report. See why I like hitting them with snail mail instead of going through the computer? Chances are you could increase your score simply because someone couldn’t get to your request fast enough. However, any action is better than none.
This may seem overwhelming, but you’ll start to understand more and more as you investigate. And, once you have a good credit score, you can call your credit card companies and ask them to reduce your interest rate. You will no longer need to provide landlords with a bigger deposit, and who knows, maybe you’ll find yourself in a position to buy that car. Or better yet, you might find yourself in a position to buy a home. You deserve it. After all, you took action to make a change. A change for the better.