Checking your credit regularly is a crucial step to rebuilding your life. It helps you keep up with the information that is reported to each credit bureau. If you are looking to raise your credit score, a sample error or incorrect information could be costing you 100+ points. It's not just about the points; mistakes could be costing you hundreds of dollars you need to improve your life. It is essential to make sure that your credit report is free of any errors and inaccurate information. Even if the information is accurate, it is crucial that you clean up your credit score if a negative mark can be removed. Negative marks like late payments, high credit utilization, and any other marks you can take action to remove you need to do it.
It's the first step to financial freedom.
You don't have to wait to get started; you can start now by keeping your credit utilization low and making your payments on time
So how do you go about cleaning your credit yourself? Use our simple tips that have work to remove marks on our credit report.
Take These Five steps to start Cleaning your credit score today:
1. Get Your Credit Reports (it's FREE!)
The Fair Debt Collection Practices Act of 'section 809 Validation of debts' require collection agencies to validate debts they are in the process of collecting. You only have to request for them to validate the debt on your credit report. The first step is to visit AnnualCreditReport.com to request a one free credit report every year from each of the three major credit reporting bureaus, Equifax, Experian, and TransUnion. Due to the recent pandemic, you can access your score weekly until April 2021 with each bureau to keep up with any inaccurate information. You can view your Equifax and TransUnion scores update weekly by signing up with creditkarma.com Requesting those reports allows you to be aware of any and all issues that need to be addressed immediately.
2. Go Through Your Credit Reports (With a Fine Tooth Comb)
It can take days or weeks, and of course, it will most likely be tedious, but stay focus. You need to be aware of EVERYTHING that is on your report. Check for accounts (old or new).
Check for all marks on your report for the following items :
Full Credit limit
High Revolving balance
Account status (Open, Closed, ....)
Payment status (Judgment, Collection,....)
Date opened / Date closed (check all dates)
Anything other information that appears to be inaccurate
Make sure to pay attention to your personal information is accurate. You want to make sure things like your name, address, and other personal information are correct. Your personal information may not impact your score, but you also want to make sure no one uses your identity. Any signs of a different address or your age, date of birth could be a strong sign of identity theft. Reading through each line highlights everything that needs to be addressed in your report.
3. Now Dispute Any and All Errors
So how do you get those negative marks off your report? To get any negative marks to remove from your credit report, you need to get in contact with the lender or creditor or file a dispute with the credit bureau. Any information that is incorrect on your credit report dispute the error by filing a formal complaint with the bureau. It's essential to file a dispute with each credit bureau to ensure all three accounts are clear. Make sure to include all supporting documents payments statement, agreements arrangements, and anything else that support your dispute. You can file a dispute with Equifax and Transunion through creditkarma.com as well; it's free too. Each error you correct and is removed from your account could be worth 10s to 100s of points. The fastest route for late payments is to reach out to the creditor or lender themselves to work out a deal. You will find lenders are more agreeable if you have a long history of on-time payments and will continue to make payments in the future. If you still have a balance on a current or even on close account, work out a payment with the lender in exchange to have those late payments removed. It is crucial to get a written agreement from the lender to ensure those terms will be met. One way to do this is to write a 'Good Will Letter', they don't always work, but when they do, the lender will contact the bureaus and remove your late payments. The creditor is under no obligation to do remove those marks, but some will if you approach them with respect, have made your payments, and have a valid reason for late payments.
Collections, Bankruptcy, Foreclosure, Judgment, and More....
Negative marks like Collections or Bankruptcy are more serious and harder to simply remove off your credit reports, but you can always give it a try on your own. Start by asking the creditors to work out an agreement to see if marks can be removed. Be aware; debt collectors may have contracts with credit reporting agencies that prohibit them from receiving payment for the removal of negative marks. That means they will not risk their company and relationship base on a simple request. In this case, writing a 'Good Will Letter' or Negotiate a Pay-for-Delete Agreement is not the best route. If the information is incorrect or inaccurate, you can dispute the negative mark to validate the debt and have it removed. Generally, negative marks such as late or missed payments, accounts sent to collection, accounts not being paid as agreed, or bankruptcies stay on your credit report for approximately seven years. You can use a free service for negative marks like collectionshield360.com to see if they can help. You may have to just play the waiting game and wait for the negative marks to age and fall off in most cases.
If you believe that you have been a victim of identity theft, immediately add a fraud alert and freeze your credit. It is the best way to protect your credit (credit freeze is available for free in the USA). Next, make sure to file a police report with as much information as possible from the incorrect account. You will also want to sign up at www.identitytheft.gov; they can help you report and recover from identity theft.
4. Lower Your Credit Utilization
Your credit utilization is the ratio of how much credit you use to how much is available to you. In general, you want low credit usage to help keep your score high. Most advise to stay 30% or lower, but if you can keep your balance at zero, never carry a balance to avoid paying credit card interest rate. Your credit utilization counts as 35% of your score that's a huge chunk already; keeping it at zero does a lot for your score. A high credit usage can indicate you depending on credit and not having enough funds to pay them off. That will make you seem more of a credit risk to creditors later down the line, as well as lowering your sore. Paying off your debts lower your risk factor, raise your credit, and prevent additional fees from being added to your account. A rule of thumb to use is unless you have the cash (half or all of it) don't use your card, then make your payment right after it's posted.
5. Pay attention to Any Outstanding Judgments or Loans
It's essential to show that you are taking care of your obligations. Any loans or judgments that haven’t been paid on your credit report needs to be taking care off. Having unpaid loans or judgments on your credit report could be driving your credit score down. Not everyone has the funds to just pay off their loans, lenders usually have a payment plan you can set up. Don't forget to check your funds to make sure you can meet the monthly payments; it's crucial to continue making payments and to make them on time. Don't be afraid to ask the lender to pay a lesser amount than owed; depending on your loan, you may be able to work out a deal and pay a lump sum.
What else can You do when all else fails?
For most late payments going about the dispute route almost always works. If you can't get any response or just don't have the time, it may be time to try using a credit repair service. It is important to read reviews, ask lots of questions, and reach the company more before signing up. Some repair companies may just be taking your money for months for something you could be doing yourself.
Cleaning up your credit is one of the best things you can do to give yourself a fighting chance. You will have access to new funds and a chance to do more if you want to improve your lifestyle or start a business. All you have to do is take the time to clean up what is under your name by making sure that everything reported on your credit score is correct.