As a REALTOR, I know how critical a good credit score is to have. There are several things that one can do to quickly clean up their credit.
Checking your credit report.
Checking your credit report is quick, easy, and best of all…FREE! Every American is allowed by law a free copy of their credit report, from all three bureaus, every year. You can get your free copy here www.annualcreditreport.com
The next thing to do is rid your credit of any errors or questionable debt. Ever looked at your report and wondered, for example, “Who is 123 collection agency, and why do I owe them money”? If so, ask that credit reporting agency to verify the accuracy of the debt.
On each agencies’ website you will want to look for any negative reports. There you will find information on how to dispute a bad debt. What many people do not know is that it is the creditor’s burden to provide accurate and verifiable proof that you owe that debt. You can quickly dispute a debt on each credit reporting agencies website. Once a dispute has been filed, the creditor (123 collection agency) then has 30 days to provide reliable and accurate proof that you owe this debt and that the amount is correct. If they fail to provide verification within the 30 days, BY LAW, the credit bureau must then remove that ding from your credit report.
It can’t really be that easy?
Yes, actually it is. You see, 123 collection agency may have bought your old credit card debt from XYZ collections, who bought it originally 20 years ago from Bank ABC. More often than not, the paper trail needed to support their claims of a bad debt was lost in the electronic shuffle of button pushing. Perhaps you paid that original debt off 15 years ago. Maybe you have attempted to pay it but were unable to find out how. Perhaps it was a case of identity theft. Regardless, if it cannot be verified, it must be removed from your credit report.
Taking care of what’s left.
After your 30 days dispute is up, the credit bureaus will notify you of the changes to your credit report. The next thing to do is pay off the remaining items. You may have an $80 dentist bill that you forgot about. Pay it. Oh, and oops there is that old $250 credit card bill from 5 years ago. Pay it too. If you do not, you may end up in a vicious never ending cycle of bad credit. The easiest thing to do is to wait until you have the money in your checking account then pay off a bad debt completely. When you do, it is critical to obtain written documentation that you have satisfied that debt and ensure that it is reported to the credit bureau.
Get another credit card.
Saaaay Whaaat? Yup, that’s right, the final step to credit restoration is to start building good credit. Go to your local bank or credit union and open up a SECURED credit card account. You give them $100 bucks, and they give you a card with a $100 credit limit. Once you have it, cut it up and forget about it. It will just sit on your credit report, looking pretty, all while building a good credit history. There is one thing to remember however, the lender that issues that card MUST report to all 3 credit bureaus. If they do not, you are just wasting your time and money opening it.
Finally! I have good credit!!
Follow all the steps above and your credit score will start climbing in no time. You may even be able to qualify for a home loan in a matter of months! If so, don’t forget your friendly neighborhood Realtor, ahem. Let me know when you are ready, and I’ll help you find your piece of the American Dream too!!