How to Fix Your Credit Report

If you are having problems getting credit lately, you may need to take a look at your credit report, and then do some repairs on it. Be careful not to fall victim to some of the credit repair scams out there. If you go about repairing your credit the right way, you'll soon see the results of your dedicated, hard work.

We've outlined the entire process of fixing your credit report below. Follow along to whip your credit into shape

Obtain and Review your Credit Report

The first thing you'll have to do is to get a current copy of your credit report. For more information, see our article on How To Get A Credit Report. After you've completed this crucial step, you're ready to move on to the next one.

You'll need to go over your credit report with a fine-toothed comb. To really understand how to read the report, you'll have to learn each credit reporting agency's codes in relation to the information on your personal account (Yes, they all use different codes!). Each credit code will come with a key, or you can log onto the various web sites for more information or help.

Next, you'll have to take a close look at the personal information listed on your reports. Many times, this is the source of the errors because someone else's credit information has appeared on your report. For instance, perhaps your name is Sally Marks, and you've always maintained good credit practices. But after you ordered your report, you see that there are some false credit marks on your report. After looking closely, it could be that your name appears as Sally Mark, and perhaps she wasn't as careful with her credit as you were with yours. Do you see how your personal information can falsely affect your credit report? Go through and verify the following pieces of information carefully:

Look closely at your name and make sure that it's spelled correctly
Your address - both current and past ones
Your birth date
Your social security number
Your state identification number
Your employment information
Your spouse's name. (and any other information about him or her.)

It's important that you contest any personal information that isn't correct, because this will likely clear up any other erroneous information on your credit report. Make a list of everything that you found, and then set it aside.

Next, you should look at the credit-related information on your report. Mark and make a list of anything that is erroneous on each credit report. (They may not all be the same.) You should rank them in order of their significance. Here's a guide of what to go over, listed in order of importance:

Personal information
Any listed bankruptcies—both personal and business-related.
Any notes that indicate that you've been to credit counseling
Foreclosure information
Loan defaults or charge back information
Repossessions (house, car or other material goods)
Court judgments or other legal assessments
A report that one of your loans has gone to a collection agency
Marks indicating past due payments
Marks indicating any late payments
Numerous credit inquiries
Any rejections of credit

Make a note for each of the above type of item that is erroneous. It is important that you contact each of the credit reporting agencies about each item because even if the information may not appear on that particular report, by notifying them you will prevent it from cropping up in the future. Now, get ready to send the information off to the credit bureaus.

Write to the Credit Bureaus

Because many people in the past have written letters claiming that all bad marks on their credit were erroneous, credit reporting agencies tend to brush off complaints where a lot of mistakes are lumped together. In fact, if you do this in your letter, you may get a response from the credit bureau warning you that frivolous claims are illegal. However, if you are certain that the information is false, stick to your guns and insist that they investigate your claims.

Instead of sending a letter listing all of your disputes in a single list, pick out the most damaging error on your credit report and then write a letter to each of the credit agencies explaining what the error is, and why you believe it is wrong. You must be very clear in your letter, and you should use words such as erroneous, misleading, unverifiable and outdated. Remember, you have the right to dispute wrong information on your report, but the credit agency doesn't really benefit from investigating the errors. Knowing that, be specific in your letter and assert your rights for a fair, thorough investigation.

You will receive a letter from the credit reporting agencies within 30 days telling you that your dispute is under investigation, and then another letter 30 days later informing you that your dispute has been resolved. (Hopefully on your side.) Now, it's time to write another letter.

Keep Writing Letters to the Credit Bureaus

You should continue this process with each and every questionable mark on your credit report by writing to all three agencies. Many times a credit bureau won't answer dispute letters but by law they are under an obligation to perform investigations for each false mark on your report. Even with this knowledge on your side, you may still have to use strong language to get them to respond. Make sure to send your mail registered. If you simply don't get a response and you have given them fair warning by writing another letter without response, you should file a complaint with the FTC.

It is absolutely crucial that you keep meticulous records for every letter you send the credit reporting agencies in case you need to prove your case to the FTC or an attorney. Remember, if the credit bureau repeatedly ignores your letters, even after you have reminded them of their obligations, they may be liable to you under the law.

As you can see, repairing your credit report can be done, but it will take commitment and effort on your part. But for those with a blemished report, the process is more than achievable.

Summary

Beware of the "quick fix," as repairing your credit report takes time.
First, obtain your credit report.
Next, go over all and verify that all of your personal information is correct.
Make a list of all the inaccuracies on your report, according to their level of importance.
Write a letter for each error to each of the three credit bureaus.
Continue to write letters until each error is corrected.
Document everything you do.

Now that you know the right way to fix your credit report, let's take a closer look at the wrong way in Can You Really Get a New Credit Identity?.