How to do the work you need to do to repair your credit.
Credit repair works two ways:
- You can do the work yourself.
- You can use a service professional to do the work for you.
No matter which option you take, the actual steps in the process are almost exactly the same – it’s just a matter of who does the work. But even if you choose to use a service, knowing what’s happening throughout the repair process helps you understand the work that needs to be done and have peace of mind that everything is going smoothly.
So here is a step-by-step walk through the process:
Step 1: Pull your credit reports
First you need to get a copy of all three of your credit files. This means pulling one credit report from each bureau – Experian, Equifax and TransUnion. Each agency maintains its own proprietary version of your credit history, and the reports can be different. So that means you need all three to correct your credit completely.
You have a right to receive a free copy of each of your credit reports once every twelve months. You can download copies through annualcreditreport.com.
Step 2: Review your reports for errors
Next you look through each report to identify mistakes. The following provides a list of common mistakes that can drive down your credit score:
- Incorrect aliases (i.e. the bureau links accounts from an alternate name that isn’t you)
- Late or missed payments that were made on time
- Outdated or incorrect account statuses
- Overestimated account balance
- Duplicate accounts
- Paid collections accounts
- Paid tax liens
- Outdated credit penalties (outdated bankruptcy, foreclosure, etc)
Which of the following types of information is not included in your credit report?
a) Rent payments
b) Previous address
c) Previous employer
d) Medical bills
Rent payments are not included in your credit reports unless a special allowance is made to include them. In most cases, rent along with utility payments, never appear on your reports.
a) Rent payments
Step 3: Detail errors in a dispute letter and provide proof
Once you have all of the mistakes identified, you draft a dispute letter to each bureau detailing the mistakes you identified. If you have a large number of mistakes in one report, you may need to split it up and send the disputes in sets; only include about 5-7 disputes in one letter.
Note that each bureau also provides an online dispute portal where you can make your disputes. However, most professionals argue that you get better results going with a traditional letter instead of the more convenient online portal.
Make sure when you send your dispute, you include copies of statements, copies of checks or any other proof you have of your points. Keep the originals for your own records. If you’re sending a letter, you should also use certified mail to confirm the date of delivery – it matters below.
Step 4: Wait for a response while the creditor investigates
Once the bureau receives your dispute, a 30-day clock starts. The bureau (and the creditor or lender) have 30 days to investigate the dispute and either verify the information or confirm the error.
In some cases, the bureau may reach out for additional information; provide anything they need as quickly as possible to expedite the process.
Step 5: Remove, respond, repeat
If an error is confirmed (or the info simply can’t be verified by the creditor, or they don’t respond in time), then that item must be removed from your report. The bureau is required to provide a new copy of your credit report showing that the mistake has been removed or corrected.
If the information is verified and shown to be correct. It stays in your report as is. By law, you have the right to include a 100-word statement in your credit report about any dispute that was not removed from your report.
Fact: In theory, creditors would see a dispute statement might be more willing to lend money, although results vary.
Once all of the information disputed in your first letter are either verified or removed, you can move on to the next set of disputes if you still have mistakes that need to be corrected. Repeat steps three and four until all of the items in each credit report have either been removed or verified.