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What do the credit agencies say?
You need to know what the credit-reporting agencies are saying about you, to get your Credit Report online. The credit score is a statistical tool designed to measure likelihood you’ll pay your bills. You're entitled to a free copy of your report, however, if you've recently been denied credit. But you must order the report from the same credit bureau(s) that the lender used in rejecting your application, and you must order it within 30 days of the denial. Review your credit history once a year to check for errors and find out what creditors are saying about you.
Stay away from ‘repair’ clinics
What you don’t need is a credit-repair clinic. These so-called clinics offer to help you clean up your credit by using loopholes in the law that only they know about. They may also promise to remove negative information from your file or to get you a major credit card.
Some repair clinics may even get you into legal trouble by encouraging you to distort the information in your credit file, or by helping you to initiate a new file with a new address and federal identification number.
There are no special tricks that these credit repair clinics know, experts say. You can clean up your credit report yourself.
Here are five steps to credit repair:
Lock your cards away.
Don't close your accounts yet. If your credit rating has been damaged, you may have trouble getting new cards. But stop using them. Your immediate goal is to repair your credit rating and to get out of debt.
Figure out where you stand.
No one likes to focus on budgets and net-worth statements. It's particularly painful if you suspect your income is less than your debt and that your net worth is in minus territory. Still, finding out the truth is a necessary first step, just like stepping on the scale before you begin to diet. It helps you measure your success.
Devise a plan.
If you’re going to clear up your credit rating, you must begin paying your bills on time. That means you pay at least the minimum balance on each bill within 30 days. Determine whether you can do that. If you aren't even close, consider credit counseling. If it's hopeless, you may want to consider bankruptcy and a fresh start. Determine which course of action you will take and stick to your guns.
Negotiate with creditors.
Nine out of 10 creditors will renegotiate terms with you if you’re having trouble paying bills. Good candidates are gasoline companies, utility companies, hospitals and doctors. Write a letter to these creditors describing your problem and requesting a reduced payment schedule. Then stick to your new schedule.
Add pertinent information to your credit file.
Your credit report may be damaged as much by the information that is omitted as by the negative information that is found there. Creditors are not required to report information to a credit bureau. But you are entitled to add information that you feel will help your rating.
The law says you are allowed to write a letter of up to 100 words involving any credit dispute and that the agency must provide to any creditors who ask for information. That might include the details of loans that you paid on schedule, active accounts where you have a good record, salary increases at your job, and information about your mortgage, car loan or the settlements of disputed bills.
Click Here for a
copy of Dispute Letter.
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