If you are planning to take out a mortgage, check your credit score first. A total of under 760 makes borrowing complicated. Your application may be rejected, or the interest will be higher than you wished for. Unfortunately, when the credit score is bad but incorrect, there is no way to persuade the lender to reconsider. Therefore, plan ahead, check your FICO score and have it repaired. Here is how to do it.
It is not uncommon for credit reports to be flawed. They may include information about events that never happened, such as repossessions, late payments, charge-offs, etc. You can obtain your score via apps like Credit Karma and request your reports from the major bureaus once a year.
By law, every US citizen may get a free copy of their data from all three agencies — Experian, Equifax, and TransUnion. In theory, you may collect the records, scrutinize them, and dispute any errors by yourself. However, this is a difficult and drawn-out process. Many consumers prefer to delegate the job to professionals for a modest monthly fee. Consider the best credit repair services reviewed on legalcreditrepairservices.com to save time.
How to Repair Yourself
Now, due to the pandemic, you may collect your reports monthly, not annually. Obtain free copies of your records from www.annualcreditreport.com. To access the information, you will need to specify your full name and address, date of birth, and Social Security number. Alternatively, send your request in writing or call the agency — you will get the results within 15 days. After you download or receive the files, examine them carefully, going line by line.
1. Analyze the Items
Inaccuracies include outdated entries, duplicates, and information that is outright false. For instance, you may see a repossession or eviction that has never happened. When people consolidate debts, their reports may also feature inaccurate payments. All these things drag down the total, making you a less eligible applicant. To get the best conditions for your mortgage, you need to wipe these inaccuracies off the records.
It is just as important to verify your personal information on the file. Check the spelling of your name, address, etc. You may also find that you have been a victim of identity theft. If fraudsters obtain your sensitive details, they may take out loans in your name. Make sure all the obligations mentioned are correct.
2. Gather Your Proof
To show that the negative entries are false, you need proof. You may reach out to creditors asking them to validate your debt. If some information is inaccurate, and they may no longer report it to the bureaus. Moreover, institutions must include a notice of the dispute every time they share your data in the future.
Gather bank statements and other documentation for the credit bureaus. Be meticulous — if the reporting agencies request additional corroboration, there may be a lot of back and forth. The process will take many more months than it would otherwise.
3. Liaise with Bureaus
Now, after you have pinpointed the mistakes and collected your evidence, contact the bureaus. You may find templates of dispute letters on the website of The Consumer Financial Protection Bureau. Note that if you have multiple mistakes to remove, it is advisable to split them between different cases. Four is the optimal number for each letter.
When communicating with the creditors and bureaus, it is worth ensuring hard evidence of the exchange. Send your correspondence by certified mail. This way, you will be able to establish that your requests have been received and when. An obligation of every bureau is to investigate a dispute and provide a formal reply within 30 days.
The agency may request extra evidence or make changes to your records. If the latter happens, you should get a free copy of your corrected credit report. This does not count as your free annual copy.
Benefits of Delegation
Note that specific creditors share information with specific reporting agencies. Thus, records from different bureaus vary, and they must be considered collectively. This complicates the process, particularly when mistakes are found in all three documents. Unsurprisingly, few consumers have enough patience, time, and legal expertise to dispute the errors by themselves.
A credit repair company will work on your behalf. It will obtain the records, find the accuracies, collect evidence and send letters. All you need to do is track the progress! Professionals compose different types of formal letters like goodwill letters to creditors or cease and desist letters to collectors. They will dispute any derogatories and have them removed. While the results are not guaranteed, many firms offer refunds if their performance falls short of expectations.
These companies may or may not be accredited with the Better Business Bureau. Not every provider should be trusted, but there is a wealth of customer feedback and expert reviews online. Choose a service package suitable for your case. If your records are poor due to your own failures, you may be offered a special credit line to rebuild them.