Tips to Clean Up Your Credit Report FAST
Nov 20, 2000
I recently bought a home. Before I was able to qualify for a mortgage, I had to finally face my credit report and some past credit problems.
If youíre anything like me, Itís easy to keep a running tally in your head of past credit mistakes, but you might actually be relived to discover what is contained in your credit report. Instead of listing every single mistake youíve ever made, youíll probably find a few errors that need to be corrected. Luckily, each report comes with a form to return if you find inaccuracies. They are required by law to check into each complaint. In a few weeks youíll receive a brand new credit report Ė a cleaner one.
Did you also know that it is important to request a report from all three major reporting companies, because each one is different? If you arenít lucky enough to live in one of the States (like Massachusetts) where you are entitled to free credit reports, you can avoid the $8 - $15 fee by applying for and being rejected by a credit card company. You are then entitled to obtain a free report outlining the reasons why you were denied. (Every time you apply for a card, this also appears on your report and can be perceived negatively, so only apply for a card if you really want it.)
Some Problems You Might Find:
1. Accounts Listed Twice
Sometimes the name is slightly different, but it can add to your list of debts and make things look worse than they are. You can request that one of them be removed after explaining that it is a duplicate.
These are those credit card companies that finally stopped sending you bills. They wrote you off for a tax credit. The only problem is that they still appear on your report with the full balance owed that you never paid. (I had three of these accounts over 5 years old and could not get a mortgage loan without taking care of them). Luckily, phone numbers and addresses are listed with each creditor along with account numbers and balances. If there is no direct number and you do not have time to write, look them up on the web. Most large companies have web sites and you can contact customer service through them.
Contact the company directly and ask to set up a payment plan. Sometimes you can negotiate to pay them off in a reduced one-lump sum. If youíve ever received a letter from a creditor telling you they will accept a one-time payment of less than the original price if you respond in the next few days Ė keep it even if you arenít able to pay it. Once youíve saved up the cash, call the company and mention the letter. Let them know you are willing to pay the lump sum. I was able to pay off two of mine this way. One was originally $865 and I paid $365 in a one-lump payment.
3. Accounts in Good Standing Not Listed:
I had heard that the best way to get good credit was to have a record of paying on time. Getting bills in on time was more a disorganized habit then intentional for me, so I signed up for auto deductions for my student loan and also for my car payment. After two years of proudly paying these bills on time, I discovered that they werenít even listed on my credit report! I immediately called and wrote both loan companies and asked them to report these accounts to all three credit agencies.
NOTE *** This is one of the best things you can do for your credit rating if you have trouble getting bills paid early or on time. A bonus to signing up for auto deductions is that you often get a slight discount from the loan company for doing so Ė both my student loans and car insurance are discounted.
If this sounds like a lot of work, it really isnít. It took me 5 months to clean up mine before I could qualify for a mortgage. One of the best outcomes is that my credit report no longer feels like a skeleton locked in my closet. What a relief!