Credit repair is serious business, or at least it was for me. After I graduated from high school and stepped foot on the campus of my university. I thought to myself, yep I made it. Finally free! I was on my own paying for or at least attempting to pay for my own education when I realized I needed just a bit more financial help. Being 18 and all, I thought, “Hmm…let’s get a credit card”. After all, I had been well trained on how to avoid the down ward cycle of credit card debt and felt I was ready to handle my own credit line responsibly.
At my college, they had one of those free food events for the freshmen and of course tons of vendors ready to sign us up for everything from cells phone plans to checking accounts. That’s when I saw my opportunity. I applied for the student line of credit only to be denied based on my credit score and bad credit history. I was shocked! After all I had never had a credit card before, a loan, or even bills. How could I have had bad credit history.
Still in a state of disbelieve, I turned to my laptop for answers. I search out for a free credit score on https://www.freecreditscore.com/ and looked at the pages and pages of bad payment history. This went back years before I could legally have any of the items and unpaid bills. How could this be! I then realized that the addresses used were some of my relative’s addresses. My own people had used my name to buy what their heart desired and refused to pay the bills. They had already messed up their credit so why not messed up my good name. All of a sudden, freedom didn’t feel so free. So I knew I had to clean up my credit, but I just didn’t know how. So let’s break down how to fix your credit.
In my research I discovered that I could go ahead and sign up for what is considered a secured credit card for credit repair. This is a type of credit card that you pay a deposit for whatever credit limit you want to have directly to the credit card vendor. You would then use the card like a credit card, never going over your limit, and pay back whatever you purchased on the card. This is what I did. I used the company Applied Bank- http://www.appliedbank.com/. I signed up for the program on line and sent them $200. Hey I didn’t have that much money in college and $200 was a lot of money for me back then. Nevertheless, they approved my unsecured card application and sent me a credit card with a limit of $200 for credit repair. From that point on I would only use the card up to $20-$30 never using more than that. This helped credit companies see that I was a responsible credit card holder. That card helped me show that I had a positive credit history. However, the real credit repair did not start until after I graduated when I realized that I would want a new car and mortgage one day.
Thus my credit repair plan began:
Step one in how to fix your credit: I first pulled my credit report again. I noted all of the items that were outstanding on my credit history which usually stays on your credit for 7 years unless your account is sold to a debt collection agency who can then continually report your bad credit for many years after you default on payment. You can request a credit report from credit karma, annualcreditreport.com, sometimes even the banks can pull a free credit report for free once a year. If a company is asking for your credit card information prior to giving you your credit score, run. There are too many free ways to get your credit report, you do not need to pay.
Step two: Review your credit history if you find there are any inaccurate entries, contact those companies or debt collection agencies and have them confirm that you are in fact the person that owns that debt. Tell the company that is reporting the credit, in writing, those particular line items that you think are not correct. Always keep a copy of the letter that you write. Send the letter by certified mail, and request the return receipt. This helps to ensure that the company receives your letter. The credit reporting company must follow up with you within 30 days to inform you of the results of their investigation. If they find that the debt is inaccurate they must report their findings to the nationwide credit companies: Equifax, Experian, and TransUnion. They must also inform you in writing of their results. This is where a lot of these debt collection agencies wither away because they can’t prove it was you who owns that debt. When I sent out my letters, a lot of companies simply withdrew the negative reports and reported the debt as paid in full or removed them all together. However, for the ones that held on and stated that yes it’s my debt, I requested more information. I requested written notice of their investigation, the name, company, company address, and the phone number of the company that I did not pay. Basically you’re asking them who is the company that is saying that I did not pay this bill. What was my account number? When did I default on payment? What was my address at the time of the default? Essentially, you are making sure that they have the correct person and it’s a genuine claim.
Step Three is debt settlement: If this is your debt and you know it is your debt. Sometimes sending out the letters can remove debt that you did incur, however if it is truly your debt they will be able to prove it is yours. Some people choose at this time to leave it on their credit history and take the gamble that the debt collection agency will stop reporting the debt after seven years, but I did not have that kind of time I had to move forward with debt settlement. Even though it was not my debt the only way to prove it was not mine was to take my family members to court. That was not going to happen. So I bit the bullet and decided to pay the debts. The good thing about these debt collection agency, they like to negotiate. After all their goal is debt settlement. So you can end up paying significantly less than the total cost of the debt. For example, one of the debts was for $220.53 I was able to pay it off in full for $45.63. Very nice! However, before you start making payments, you want to get in writing from the debt collection agency that they will report paid in full to Equifax, Experian, and TransUnion. Otherwise that debt will remain on your credit history. So whenever I have a friend or family member ask me how to fix your credit, I tell them my story.
Step Four: Stay determined in your own credit repair. You can do this. It does get overwhelming and it may at times not seem fair, but you can get through this. What kind of issues are you running into with repairing your credit?