Did you know your good credit can be a tool that helps you build wealth?
On the other hand, bad credit will slow down the wealth building process.
Since your ultimate goal is to become debt free and wealthy, you should be
concerned with your credit rating and know how to make it as high as
possible. The Abundant Wealth Credit Repair Center was created to help
you improve your credit rating and maintain a great credit score. Use
this step-by-step guide to learn about your credit, understand what affects
your credit rating in which ways, and what you can do (and what not to do)
to have the highest possible credit score.
Fixing up your credit is not a difficult or time consuming process.
New laws and computer technology have made what used to be 'almost
impossible' a fairly easy task. Repairing your credit generally
involves getting a copy of your credit report from each of the reporting
agencies, reviewing the reports, and disputing errors. It's really as easy
as 1-2-3.
Step 1 - Understand How Credit Works. Before you begin
the process of checking (and if necessary repairing) your credit you need to
know the basics of what credit is and how you are affected by your credit
rating. This is covered in the first four courses of the
Abundant Wealth Training Program. So,
before you go any further, go back and review Courses One through Four, then
come back for step 2. You also need to
review this article for a great primer
on credit and credit repair.
Step 2 - Know Your Credit History. The next step is to
learn what information the credit reporting agencies have about you on file.
You should realize that over 70% of all credit reports have errors.
So, statistically two of the three major reporting agencies reports will
need to be corrected by you. In reality, you will probably find one or
more items on each of the three reports you wish to dispute or correct.
Once you have obtained your credit reports you will need to review them very
carefully. Start by verifying all of the personal information about
your, including previous addresses, current address, and social security
number or other identifying numbers. Each of the three major reports
is in a slightly different format, but they all come with detailed
information on how to read them and how to interpret their unique codes and
sections. This is a very important step - look over each report
carefully and mark anything that is not correct - you will use this
information to dispute the errors in step 3. Here is how to get a copy
of your credit report from the major credit bureaus:
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Obtaining Your Credit Reports
By now you know there are three major
credit reporting bureaus. It is these three companies that you
need to obtain your current credit report from. It is not
difficult to obtain a free credit report, and it usually only takes a
week or so to receive it in the mail. Do not use an online-only
service to get your first report. These online reports rarely
ever include the FULL REPORT you will get when you request it by mail.
Here is an example credit report request
letter you can use to obtain your credit report. All you
need to do is copy the text of that letter into your word processor,
modify it with your personal information, print it and mail it.
Be sure you include the name of the credit agency at the top of the
letter along with your full name, current address, birth date, and
social security and drivers license number. This letter was
written for someone who has been denied credit, you might need to
modify the text of the letter to meet your specific situation.
Be sure you send a letter to ALL THREE credit bureaus, as you will
need to review all of the reports to ensure your reports are accurate.
WARNING: All three of the
major credit reporting agencies will try to sell you all kinds of
stuff. Be aware that the credit reports, credit monitoring
services, credit score services and identity theft products and
insurance offered by the credit bureaus are EXPENSIVE and can be
obtained at much better prices elsewhere. This is covered in the
training program.
TIP: If you are currently
aware of any error in your credit reports, even something as simple as
a typo in your address, you might be able to dispute the information
online AND get your report for free. Visit the website of the
credit bureaus listed above and look for their online dispute link.
Use their online form to dispute the information in question.
They will mail you a confirmation of the dispute and, usually a week
or so later, a complete copy of the updated report.
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Step 3 - Eliminate Bad Credit Information. Now that you
have all three of your credit reports you need to very carefully go over
each report and search for errors. Review each page and look for any
type of error and make a note of it. For each report you will need to
send a dispute letter explaining what the error is and what you believe it
should be.
Your ultimate goal is to
remove ALL unfavorable items from your credit file!
Each time you dispute an error resulting in a correction to your report you
will receive an updated (corrected) credit report. It is not uncommon for
you to find additional errors or omissions that were not disputed or might
have been overlooked the first time you looked over the report. There may
also be information you want changed that was insignificant compared to the
problems you found on the first report. With that in mind, you will probably
want to re-evaluate the new report and submit new dispute requests to finish
the clean up. Do not be discouraged if you have to do this two or three
times. With each process your credit report gets better and better. Soon you
will be nit-picking the minor details instead of sweating major 'credit
damaging' negative information on your report.
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Sample Dispute Letters
The first step to eliminating bad credit is to correct any errors and
account omissions from your report. Be sure to include as much
supporting information as possible when you dispute an item on your
credit report. This might include receipts or an invoice showing
paid-in-full. Here are some example
letters you can use when writing disputes to the credit bureaus:
Account Under Dispute - This is a
generic dispute letter you can modify to your needs.
Late Payment Dispute - Use
this letter to dispute a payment that has been reported late.
Delinquency Dispute -
Disputes a loan that is currently being reported as delinquent.
Not Your Account Dispute -
Use this letter to remove accounts that are not your accounts.
Incomplete Report Dispute
- Adds missing account information to your credit report.
Missing Entries Dispute -
Adds missing information to your credit report.
Co-Signed Account Dispute -
Requests that an account be listed as a co-signor.
NOTE: Use any of these sample letters to get you started and be
sure to modify the letters to meet your specific needs. You
don't need to use any specific format when contacting the credit
bureaus, just let them know what needs to be fixed and include enough
personal information so they know what account to check. You can
also dispute more than one item in each letter, just be very clear
when you write the letters about what you are disputing.
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Fine Tuning Your Credit Report:
Your credit report is probably looking better now that you have
completed the process of reviewing for errors, submitting disputes, and have
received new reports reflecting the changes you requested. The next step
in the credit repair process is to minimize the damage caused
by negative items and to make sure all of your good credit is reported
properly. Simply correcting the errors might be enough for some
people, but more than likely there are a few things left to work on.
Here are some things you can do to erase those bad marks from your credit
history:
Dispute Negative Information - After you have corrected all of
the mistakes on your credit report you may still find some of the remaining information to be
less than flattering. By far the #1 way to eliminate bad marks on your
credit report is simply to dispute them. There may be judgments,
liens, late payments, or other items causing your credit score to be lower
that you would like.
The law gives you have the right to verify any item on your credit report.
When you dispute an item on your report the credit bureau has a limited
amount of time to verify the information in question with the company that
submitted it. If the item in dispute is old, is a small amount, or the
company that submitted the information has moved or gone out of business,
chances are the item will be completely removed from your report. Yes,
you read that right. Simply disputing an item
can remove it from your report.
One sneaky trick the banks, mortgage companies, credit card companies and
credit bureaus use is to list debts on your report which you are not
personally responsible for. For example, if your spouse gets a new
Visa card and lists you also a card holder, it is likely the new card will
show up on your credit report as well as your spouses report. This is
simply illegal. The credit bureau knows it, and so does the credit
card company. But, it is to their advantage for this information to be
there because it encourages you to pay the bill on time. However, here
is the hard truth. If you have a card listed on your report where you
are not the debtor (you did not sign the credit agreement), all you
have to do is dispute the card, simply stating that it is not your card.
It will be promptly removed from your report, but not your spouses.
Persistence pays off! Each time you successfully dispute an item on
your report you are entitled to a copy of the corrected report. In the
past you had to ask for this, but today it is very common for the credit
reporting agency to automatically send you an updated copy. Don't ever
stop reviewing your report and disputing incorrect, invalid, or any other
information you want verified and possibly removed. Just because an
item was not removed or corrected the first time does not mean it will not
be taken care of then next time you write in about it.
Be sure and follow these procedures with both yours and your spouses credit
report. You may find that one 'cleans up' a little better than the
other. If this is the case you may wish to use the person with the
cleanest report when you begin the debt elimination and restructuring phase
of your wealth building plan.
Negotiate With Your Creditors - Although it may seem at times the
purpose of creditors is to destroy your credit, this is not the case.
If you have an account that has been paid off or resolved but is still
reported as negative in your file, you should try to contact them about
this. For example, if it is a credit card and you have paid it off,
see if they will re-open the account and report it as in good standing.
Be sure you don't run up the card again! Most creditors want to do
business with you. Just because you had a some rough times in the past
does not mean your creditors have written you off.
Call them, write to them. Explain to them things have changed and you
wish to be in good standings with them. You might be surprised to see
what a simple phone call or letter can do.
Annotate All Bad Information in your Credit File - Even after all
that work there may be a few items left that could not be removed or
corrected. You have the right to add comments to each an every item in
your report, and doing so could make a huge difference to the creditor
reading your report at the time you apply for a loan or mortgage. The
information you can be as simple as "UNDER DISPUTE" or may be more
descriptive depending on your specific circumstance. Annotating your
report is free for you and is a simple as writing a letter to the credit
bureau stating you wish to add the following comments. Be sure to
include all of the necessary information for the credit bureau.
Sending back a copy of your report with the item in question marked is also
a good idea. This lets the credit agency know exactly who you are and
what you are annotating. Sometimes all it takes is a simple comment
explaining a situation for a banker or mortgage loan officer to consider the
item a 'no factor' in analyzing your credit worthiness.
Here are some things you can do to add good marks to your credit history:
Add Positive Information - While negative information will drive your
credit score down into the gutter, positive credit information makes your
score go up. Take a close look at all three reports and make sure all
of the positive information reported by one is on the other two. It is
common for smaller companies to report to only one agency. For
example, the furniture you bought and paid for within the guidelines of the
sale might only show up on one report. Have this good credit
information ADDED to the other reports. Look for missing department
store cards, small loans from local banks, or any other positive credit
item. This is the fuel that drives your credit score UP.
Avoid Future Problems: Monitor Your Credit Regularly - Now that
you have cleaned up your credit report it is important for you to keep an
eye on what the credit bureaus are reporting about you. It is much
easier to fix ONE problem than it is to fix a dozen. With that in mind
you should investigate using a credit monitoring service AND get all three
reports at least once every year. Check the Abundant Wealth Training
Program for more information on monitoring your credit.
Here is a review of what you need to do to get your credit in tip-top shape.
Print this page and use the check boxes to mark each area as you complete
it.
_____ - Review lessons 1
through 4 in the Abundant Wealth Training Program
_____ - Review this article
on credit and credit repair.
_____ - Obtain a current credit report from all three credit
reporting bureaus.
_____ - Review all three reports for errors and dispute any
errors.
_____ - Review the new reports and repeat the above steps until
your report is acceptable to you.
_____ - If there are still negative items on your report,
negotiate with your creditors.
_____ - Annotate any remaining negative information information
with 'your side of the story.'
_____ - Add any missing credit information that would be
beneficial to your credit score.
_____ - Monitor your credit regularly to avoid major problems in
the future.
The entire process may be completed in as little as a few weeks, or it could
take several months, depending on how much information is inaccurate and
what you are disputing. Any way you look at it you are not long away
from a better credit report and a better chance at building wealth.
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