Your Credit - How to Protect, Repair and Improve It

Published: 09th March 2009
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Can you really repair your credit? What can you do to increase your credit score? How do you check your credit report and correct any mistakes? To learn all about protecting and improving your credit, read our new report.


Your Credit: How to Protect, Improve & Repair It





You're planning to buy your new home, but when you get a copy of your credit report, you find some problems, due to loan default, late payments or non-payments in the past.





Don't give up hope. There are still steps you can take to get your credit picture in shape to make you eligible for a home mortgage loan.





Be wary, however, of companies who claim they can erase any problems from your report. They cannot. No one can legally remove information that is accurate from a credit report.





Only time, effort on your part and payment of your bills on time can make a difference. Help is offered by the Fair Credit Reporting Act (FCRA), which makes it possible for you to get a free copy of your credit report once a year. If you find information that is incorrect, there are steps you can take to correct it, as detailed later in this article.





So, If My Credit Report is Poor, I Can't Get Credit?





Not all creditors look at your credit history the same way, so it may be worthwhile to contact creditors informally to discuss their credit standards.





Your next step is improving your credit report, so if you're not too good at setting up a budget and then sticking to it, it may be a good idea to work out a repayment plan with the people you owe.





Another possibility is contacting a nonprofit credit counseling organization to work with you to solve your financial problems. But be aware: not all are reputable. For example, just because an organization says it's "nonprofit," there's no guarantee that its services are free, affordable, or even legitimate





Your financial institution, credit union or local consumer protection agency also may be good sources of information and referrals to a good credit counseling organization.





A credit counseling organization can help you manage your money and debts, help you develop a budget and offer free materials and workshops on how to control spending and start saving. A certified and experience credit counselor will discuss your entire financial situation with you and help you develop a plan to solve your money problems, but be prepared. An initial counseling session typically lasts an hour and there are follow-up sessions you will want to attend.





Do-It-Yourself Credit Check-Ups Are a Good Idea





Even if you don't have a poor credit history, it's a good idea to review your credit report periodically:








Because it affects whether you can get a loan or insurance - and how much you will have to pay for it.


To make sure the information is accurate, complete and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance or apply for a job.


To help guard against identity theft. Identity thieves may use your information to open a new credit card account in your name. Then, when they don't pay the bills, the delinquent account is reported on your credit report and this could affect your ability to get credit, insurance, or even a job.





The three consumer reporting companies - Equifax, Experian and TransUnion - have a central website, a toll-free telephone number and a mailing address where you can order your free annual report. To order, click on annualcreditreport.com, call 1-877-322-8228, or send a letter to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281





Under the FCRA, the consumer reporting company and the information provider (that is, the bank, retail store or credit card company that provides information about you for your credit report) are responsible for correcting inaccurate information in your report.





If You Find Inaccurate Information in Your Credit Report





There are two steps you need to take to dispute incorrect information on your credit report:





1. Send a Dispute Letter, telling the consumer reporting company - Equifax, Experian or TransUnion - what information on your credit report is inaccurate. Include copies (NOT originals) of documents you think prove the information to be wrong.





In addition to your complete name and address, your Dispute Letter should identify each item in your credit report that is inaccurate. State the facts and explain why you think the information is wrong. Then, request the inaccurate information be removed or corrected. You may want to enclose a copy of your credit report with the inaccurate items circled in red ink.





Send your Dispute Letter by certified mail, "return receipt requested," so you can make sure the consumer reporting company received your letter. Also, keep copies of your Dispute Letter and copies of the information you sent with it.





Here is a Sample Dispute Letter


Date





Your Name


Your Address


Your City, State, Zip Code





Complaint Department


Name of Company


Address


City, State, Zip Code





Dear Sir or Madam:





I am writing to dispute the following information in my credit report. The items I dispute also are encircled on the attached copy of the report. This item (identify each) is inaccurate because (describe what is inaccurate or incomplete and why).





I have enclosed copies of information that prove this information in inaccurate. Please investigate and correct these inaccuracies as soon as possible.





Sincerely,





Your name





Enclosures: (List what you are enclosing)





After You Send a Dispute Letter





1. The consumer reporting companies must investigate the items you think are wrong - usually within 30 days. They also must send the information you provide about the inaccuracy to the bank, retail or credit card company that provided the information.





2. The credit card company, bank or loan company must then investigate the information you've sent and report back to the consumer credit reporting company. If the information is inaccurate, the bank, loan company or credit card company must notify all three nationwide consumer reporting companies so they can correct the information on your report.





3. When the investigation is complete, Equifax, Experian or TransUnion, must give you the results in writing and a free copy of your report if the corrected information results in a change. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete.





4. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider.





5. If you request, the consumer reporting company must send notices of any correction to anyone who has received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.





6. If an investigation doesn't verify the information in inaccurate, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone receiving a copy of your report in the recent past, but you will pay a fee for this.





Looking for assistance programs, credit checklists, your credit score, tax breaks, avoiding financial scams and other financial articles? Find out more about financing your home. Know your market as your begin to look for homes in Texas.




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