Credit Repair and Credit Rebuilding Information

Introduction

Bad credit stops people from getting mortgages, car loans and credit cards. When credit can be obtained those with poor credit scores pay higher rates and fees. Most people deal with their credit report issues by ignoring them. Fortunately, fears about repairing one’s bad credit prove largely unfounded and lack of knowledge concerns easily resolve themselves with free credit repair information. By taking an aggressive approach, even folks emerging from bankruptcy can find their credit repaired back up to reasonable levels within a year or two.  The following outlines how to solve the underlying causes of bad credit, repair of a bad credit report and rebuilding credit.

Resolve outstanding issues

Before beginning a full-scale attack on one’s bad credit and repair of a negative credit report the person must first address each of the negative items and resolve them. Resolution may take many forms, which we will explore here. From a credit repair standpoint the significant starting point is “closing the book” on each of the bad credit items on the credit report. A horrible but old and closed bad credit item most often gets viewed better than an open current bad credit item. Believe it or not, a viable resolution method turns out to be a Chapter 7 bankruptcy. In this context the bankruptcy paves the way to the first step of credit repair by putting an end to the old bad credit items. While bankruptcy adds it’s own significantly terrible credit reporting item, bankruptcy by definition will be “resolved” when the case ends. In the early stages of bad a credit incident the easiest and best solution can be catching up on a payment. As with many of the circumstances we will discuss the prior late payment will still appear on the credit report. The important point being discussed in this section is resolving the initial issue. Catching up on a past due payment constitutes resolution. When payments continue delinquent for a long enough time catching up may become out of reach. Negotiating a payment plan with the creditor either directly or with the aid of a credit counselor constitutes resolution of the item for credit repair purposes. Settlement of a debt, even at a fraction of the original amount due, means resolution.

Eventually banks charge off unpaid debt balances. A charge off does not mean that a forgiveness of debt occurs, it only indicates the creditor has made an accounting notation that they do not believe that the debt will ever be repaid. A charge off represents a significant black mark on one’s credit report. Charge offs can be noted in several ways. A charge off which is unresolved appears as such on a credit report. Charge offs can be resolved the same as any other debt by either paying them in full, paying them at a discount, making a payment over time or filing a bankruptcy. Aside from the obvious downside of a charge off in that it paints the debtor in a very poor light, an open unpaid charge off indicates to a potential creditor reading your report, not only was there financial trouble at one time but further more that the debtor has not made any effort to deal with the problems.  A bankruptcy is certainly not a favorite resolution by the creditors but it shows that the debtors have recognized there is a problem and has taken some action. In terms of a credit report a bankruptcy is not a clean slate. A bankruptcy remains a nasty item on one’s credit report as long as ten years. On the positive side, however, the bankruptcy is a clear time or “line in the sand”, from which the debtor can begin to rebuild. With open unresolved charge offs there is no such point in time where rebuilding can start. Open unresolved charge offs remaining glaring poor credit cavities on ones credit report.

To convert this concept into terminology in the medical or financial industry, the first step is to “stop the bleeding”. Many people look at their financial picture and think they must cure the entire situation in one huge step. Most times this is neither something an individual with limited resources has the ability to do nor something anyone with unlimited resources could achieve. The debt and credit resolution process takes several steps. One does not go to a hospital with a gaping wound and expect to walk out perfectly cured the same evening. In the first step the doctor stops the bleeding then, as we will see, there must be time for healing of the wound itself followed by an inevitable scar and perhaps in time fading of the scar itself or cosmetic surgery.

Base line Evaluation

With the negative events resolved and the worst over with, damage assessment comes next. In order to recover from bad credit and reclaim one’s good credit a careful evaluation of the credit must take place. In the United States, three major credit-reporting agencies control the credit reporting business. Each agency maintains its own records on each individual. The most comprehensive method of reviewing one’s credit therefore requires reviewing the reports from all three bureaus, which is often referred to as a tri-merge report. The debtor can order a tri-merge report on-line from any of the major credit bureaus such as Experian or Equifax at a cost of approximately $39.00. For a smaller investment of under $16.00 an individual can view report of a single credit bureau. Learn more about credit scores and find links to get your credit score at the Credit Score FAQ. Throughout the country each zip code has one of the credit reporting agencies designated as the “preferred agency”. It makes sense then if you only plan to obtain a single credit report you should get it from the preferred agency for your area code. I’ve prepared a table of the zip codes throughout the country and the corresponding preferred agency as well as a listing of which states mandate customers may view their credit reports annually for free. Links to each of the credit bureaus can be found on the state table below. To better understand how good or bad your credit has become and communicate the situation with potential lenders, consultants or attorneys obtaining your numerical credit scores may be helpful even if it costs a bit more.

STATE	ZIP CODES	CREDIT SERVICE	FREE REPORT BY LAW
Alabama	35000-35499 35500-36999	Trans Union Equifax	No
Alaska	99500-99999	Experian	No
Arizona	85000-86999	Trans Union	No
Arkansas	71600-72999	Trans Union	No
California	90000-92399 92400-93999 94000-96699	Experian Trans Union Equifax	No
Colorado	80000-81999	Experian	Yes
Connecticut	06000-06999	Trans Union	No
Delaware	19700-19999	Trans Union	No
Florida	32000-34999	Equifax	No
Georgia	30000-31999	Equifax	Yes
Hawaii	96700-96999	Experian	No
Idaho	83200-83999	Equifax	No
Illinois	60000-62999	Trans Union	No
Indiana	46000-46299 46300-46499 46500-46699 46700-47799 47800-47999	Equifax Trans Union Equifax Trans Union Equifax	No
Iowa	50000-52999	Equifax	No
Kansas	66000-66999 67000-67999	Equifax Trans Union<	No
Kentucky	40000-42999	Trans Union<	No
Louisiana	70000-70299 70300-71599	Experian Equifax	No
Maine	03900-04999	Trans Union<	No
Maryland	20600-21999	Equifax	Yes
Massachusetts	01000-02799	Experian	Yes
Michigan	48000-48799 48800-49999	Experian Trans Union<	No
Minnesota	55000-56999	Equifax	No
Mississippi	38600-39999	Equifax	No
Missouri	63000-63699 63700-65999	Trans Union< Equifax	No
Montana	59000-59999	Equifax	No
Nebraska	68000-69999	Trans Union<	No
Nevada	89000-89999	Trans Union<	No
New Hampshire	03000-03899	Trans Union<	No
New Jersey	07000-07799 07800-08999	Experian Trans Union<	Yes
New Mexico	87000-88999	Equifax	No
New York	00400-00599 09000-09999 10000-11899 11900-14999	Experian Experian Trans Union< Experian	No
North Carolina	27000-28999	Equifax	No
North Dakota	58000-58999	Equifax	No
Ohio	43000-43399 43400-43699 43700-43999 44000-44599 44600-45899 45900-45999	Equifax Trans Union< Equifax Trans Union< Equifax Trans Union<	No
Oklahoma	73000-75000	Equifax	No
Oregon	97000-98000	Equifax	No
Pennsylvania	15000-16999 17000-19699	Experian Trans Union<	No
Rhode Island	02800-03000	Trans Union<	No
South Carolina	29000-29999	Equifax	No
South Dakota	57000-57599 57600-57799	Equifax Trans Union<	No
Tennessee	37000-37399 37400-37599 37600-38600	Equifax Experian Equifax	No
Texas	75000-78299 78300-78999 79000-79499 79500-79999	Experian Trans Union< Trans Union< Trans Union<	No
Utah	84000-84999	Experian	No
Vermont	05000-05999	Trans Union<	Yes
Virginia	22000-24699	Equifax	No
Washington	98000-99499	Equifax	No
Washington D.C.	20000-20599	Equifax	No
West Virginia	24700-25599 25600-25799 25800-25999 26000-26699 26700-26999	Equifax Trans Union< Equifax Trans Union< Equifax Equifax	No
Wisconsin	53000-54999	Trans Union<	No
Wyoming	82000-83199	Experian	No

Credit Repair: How To Help Yourself

You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail, and maybe even calls offering credit repair services. They all make the same claims:

“Credit problems? No problem!”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

“We can erase your bad credit — 100% guaranteed.”

“Create a new credit identity — legally.”

The Federal Trade Commission (FTC) says do yourself a favor and save some money, too. Don’t believe these claims: they’re very likely signs of a scam. Indeed, attorneys at the nation’s consumer protection agency say they’ve never seen a legitimate credit repair operation making those claims. The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.

Recognizing a Credit Repair Scam

Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.

The company doesn’t tell you your rights and what you can do for yourself for free.

No one can remove accurate negative information from your credit report.

The company recommends that you do not contact any of the three major national credit reporting companies directly.

The company tells you they can get rid of most or all of the negative credit information in your credit report, even if that information is accurate and current.

The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.

The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

Your Rights Regarding Credit Repair

No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.

Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA 30348-5281

Anything a credit repair clinic can do legally, you can do for yourself at little or no cost.

You can use the form in this brochure, or you can print it from ftc.gov/credit. You may order reports from each of the three consumer reporting companies at the same time, or you can stagger your requests, ordering one from each company throughout the year from the central address. Don’t contact the three nationwide consumer reporting companies individually or at another address because you may end up paying for a report that you’re entitled to get for free. In fact, each consumer reporting company may charge you up to $10.50 to purchase an additional copy of your report within a 12-month period.

It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider.

Helping Yourself

Step 1: Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of any documents that support your position. In addition to providing your complete name and address, your letter should identify each item in your report you dispute; state the facts and the reasons you dispute the information, and ask that it be removed or corrected. You may want to enclose a copy of your report, and

Sample Dispute Letter

Date

Your Name

Your Address
City, State Zip Code

Complaint Department
Name of Company
Address
City, State Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing.)

circle the items in question. Send your letter by certified mail, “return receipt requested,” so you can document that the consumer reporting company received it. Keep copies of your dispute letter and enclosures.

Consumer reporting companies must investigate the items you question within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it is required to investigate, review the relevant information, and report the results back to the consumer reporting company. If this investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide consumer reporting companies so they can correct it in your file.

When the investigation is complete, the consumer reporting company must give you the results in writing, too, and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company is not permitted to put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider. If you ask, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You also can ask that a corrected copy of your report be sent to anyone who received a copy during the past two years for employment purposes.

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay for this service.

Step 2: Tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct — that is, if the information is found to be inaccurate — the information provider may not report it again.

A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years.

Reporting Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. To calculate the seven-year reporting period, start from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.

The Credit Repair Organizations Act

Credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. And before signing, know that a credit repair company cannot:

• Make false claims about their services
• Charge you until they have completed the promised services
• Perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees.
• Before you sign a contract, be sure it specifies:
  • The payment terms for services, including the total cost
  • A detailed description of the services the company will perform
  • How long it will take to achieve the results
  • Any guarantees the company offers
  • The company’s name and business address

Have You Been Victimized?

Many states have laws regulating credit repair companies. State law enforcement officials may be helpful if you’ve lost money to credit repair scams. Don’t be embarrassed to report a problem with a credit repair company. While you may fear that contacting the government could make your problems worse, remember that laws are in place to protect you. Contact your local consumer affairs office or your state Attorney General (AGs). Many AGs have toll-free consumer hotlines; check the Blue Pages of your telephone directory for the phone number or www.naag.org for a list of state attorneys general.

Just because you have a poor credit report doesn’t mean you won’t be able to get credit.

If You Need Help

Just because you have a poor credit report doesn’t mean you can’t get credit. Creditors set their own standards, and not all look at your credit history the same way. Some may look only at recent years to evaluate you for credit, and they may give you credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.

If you’re not disciplined enough to create a workable budget and stick to it, to work out a repayment plan with your creditors, or to keep track of your mounting bills, you might consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But remember that “nonprofit” status doesn’t guarantee free, affordable, or even legitimate services. In fact, some credit counseling organizations — even some that claim non-profit status — may charge high fees or hide their fees by pressuring consumers to make “voluntary” contributions that only cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

If you are considering filing for bankruptcy, be aware that bankruptcy laws require that you get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust, the website of the U.S. Trustee Program. That’s the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Be wary of credit counseling organizations that say they are government-approved, but do not appear on the list of approved organizations.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and can help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

Do-It-Yourself Check-Up

Regardless of your credit history, financial advisors and consumer advocates recommend reviewing your credit report periodically for three important reasons:

1. The information in your credit report affects whether you can get a loan or insurance — and how much you will have to pay for it.

2. It’s important to make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.

3. It can help you deter, detect and defend against identity theft. That’s when someone uses your personal information — like your name, your Social Security number, or your credit card number — to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.

For More Information

To learn how to improve your credit worthiness and find legitimate resources for low or no-cost help, please see the following publications at ftc.gov/credit. visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad agencies if you consider using their services.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues

Your Access to Free Credit Reports — Explains why it is important to monitor our credit history, how to request a report, and how to dispute errors.

How to Dispute Credit Report Errors — Explains how to dispute and correct inaccurate information in your credit report. Includes a sample dispute letter.

Building a Better Credit Report — Learn how to legally improve your credit report, how to deal with debt, how to spot credit-related scams, and more.

Knee Deep in Debt — Discusses options to help you get back in the black, including: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy.

Fiscal Fitness: Choosing a Credit Counselor — Defines debt repayment plans, explains the differences between secured and unsecured debt, and offers questions to ask credit counseling,

CREDIT SCORE F.A.Q.’s

Q. Can you provide an explanation of a personal credit score?

A. Credit bureaus gather information about your previous payment history and use formulas to rate the likelihood of you paying a new obligation, like a loan.

Q. How do they establish my credit score?

A. Credit agencies each define your credit score in their own way, but most credit scores incorporate some or all of these elements: number of late payments, how long in terms of time a payment was late, ratio of available credit to credit used, total credit available, length of time your credit has been established, types of credit you have established, length of time since you missed a payment or had a bad credit event, number of open credit accounts, major negative court filings like bankruptcy, judgment or foreclosure, recent credit activity like new credit applications establishment of new credit or even a business trying to find your credit score or getting your credit report.

Q. What range of values can a personal credit score fall into?

A. The high score you can achieve on a credit report tops out at 850, but anything above a 650 most lenders consider a good score, above 720 a high score. Some would categorize credit scores under 550 as a low credit score while others might determine poor credit scores only those under 500.

Q. You mean not everyone looks at credit scores in the exact same way to figure which scores rate as excellent, good, fair or poor?

A. Not at all, each lender or credit provider maintains their own scale for what is a good credit score when trying to approve you for a loan or a credit card.

Q. So what’s a good credit score range?

A. Figure excellent credit might range from a 620 to 850 credit score. Good scores vary from 550 to 650, fair from 500 to 620, poor from 300 to 580, it all depends on who is looking at the credit scores.

Q. Why do some of those ranges overlap?

A. I’ll say it again, what is a good credit score or what is will take to be approved for a particular loan or credit card will depend on the credit grantor looking at the score. For example a score of 620 might be viewed as excellent by one company and only fair by another.

Q. You talked about credit reporting agencies. Are the credit scores from each of these credit report bureaus the same?

A. No, not exactly. They each have their own system for calculating credit score and all of them keep the exact formulas a secret. In addition, to a certain extent, each credit bureau may be starting with different data on which they base their credit score number.

Q. Who are these credit scoring companies?

A. Equifax, Trans Union and Experian.

Q. Those are not the names I hear about associated with credit scores, what are those?

A. Some credit reporting bureaus have their own names for their credit score product, others make use of third party calculations. The most well known credit score calculation comes from the Fair Isaac Corporation, who calls the results of their analysis a FICO score. While no one uses the name of their credit score product as much as FICO ( which may be because FICO scores come from Fair Isaac, not from Experian who makes use of the FICO score ) the score from Trans Union may get referred to as an Empirica score and Equifax as a Beacon score. Behind the scenes some say Fair Isaac has a hand in the other calculations too.

Q. Do I need to get all three of my personal credit scores?

A. No one ever said you NEED a credit report score at all.

Q. Why might I WANT to know my credit report score?

A. When you know your credit score you can plan your financial future better. For example let’s imagine you need a car loan. Over the years many people came to me with a story about how they could not get an auto loan. They gave up on the idea after a few turn downs and lived with an old car or without a vehicle at all. Sometimes the root of the problem lay not with their credit but more with knowing their credit score and in turn understanding how to get a loan with bad credit score.

Q. Explain how I might help myself get a loan if I knew my credit report score?

A. First you would adjust where to apply for a loan or credit card based on your credit score. For example major banks generally do not approve auto loans for borrowers with bad credit. Limiting loan applications to banks with poor credit usually just wastes time and brings on depression from all the loan denials.

Q. What should a person with bad credit do for an auto loan?

A. Go to a finance company, auto loan company or dealer that specializes in bad credit auto lending.

Q. How could a potential borrower be helped by knowing their credit report score before applying for a loan?

A. Often one of the first things you will be asked by a car dealer or lender is “Do you know your credit score?”

Q. Can’t lenders just look up my personal credit score?

A. Yes, but each time they do it knocks your score down just a little. If you have a low score to begin with you do not want to lose any points.

Q. Is there a limit to how far my credit score can drop from these credit inquiries?

A. Yes, at a certain point the credit bureaus figure you must be rate shopping for a particular purchase at a specific time and they limit the negative hits to your credit score.

Q. So if I know my own credit score I can save the inquiries?

A. Initially yes. In cases where you know you have a credit score of 550 one lender may say they can not grant a loan. You just saved both time and a credit check that could bring down your credit score. Another lender may say if your score really comes out at 550 they would make the loan. At some point if you decide you want that particular loan the lender will still need to run your credit and see the report for themselves, but by knowing your score you saved time and excessive credit checks.

Q. Why else would I want to know my own credit score?

A. In cases where you need to rebuild your credit score it helps to know where you started from and where you want to get to. Getting your credit score through the process help to make sure your credit improvement plans remain on track and that you have your credit score moving in the right direction.

Q. What is the difference between a credit score and a credit report?

A. A credit score represents a numeric rating of you credit as described above. A credit report lists each and every item that makes up the personal data used to calculate the credit score, the raw data not the formulas.

Q. Can I get my personal credit score for free?

A. No, you might be able to estimate it, but for an official accurate credit report score you will need to pay one of the credit reporting agencies.

Q. How much does it cost to get my credit score?

A. Less than $20, which will likely include a copy of your credit report from one credit bureau too.

Q. Can I get my credit score online?

A. Yes, you can get your credit score online and get the report online too. In fact, you can usually get it all done almost in real time. You input your personal data and pay, and you can see your credit score and credit report almost instantly.

Q. Once I get my credit score online what can I do to improve my credit score?

A. The Repair Bad Credit Report at (http://www.repairbadcreditreport.com/) guides you through that process.

Q. How fast can I improve my personal credit report score?

A. If you work hard at it you should see improvement in months as opposed to weeks or years.

Q. What if I have questions about the report itself?

A. Many sites online deal specifically with understanding the items in your credit report.

Q. Do I need my credit score from all three of the credit reporting agencies?

A. Not most of the time. When you apply for a loan the lender will get that. For some mortgages loan parameters require your “middle” score to have a certain minimum rating. Without knowing all three you cannot know what the middle score is.

Q. I thought Congress passed a new law so consumers could see their own credit report?

A. That applies to credit reports not credit report scores.

Q. If I am turned down for a loan or credit card because of my credit does the lender have to tell me what my score was?

A. No, in fact the credit bureaus would say they specifically should not reveal your personal credit score to you. They do, however have to give you a notice that your loan request got turned down because of your personal credit, which credit bureau credit reports they used to establish their decision, and that triggers the right for you to get a free copy of your credit report. Once again, the personal credit report, not the credit report score.

Q. I am checking for someone who cannot get online, do you need to get online to get your credit score?

A. No, you should be able to do it via the phone too if you have no online access.

Erroneous Items

Many of those unfamiliar with credit reports share a mistaken belief that credit reports display a near perfect accuracy. In reality errors on a credit report occur with alarming frequency. Reporting agencies rarely verify or cross check information unless they have a specific reason to do so. Therefore it becomes the obligation of each individual to verify the accuracy of their own credit report and begin the process of correcting inaccuracies of the credit report. Inaccuracies on a credit report may take several forms including reporting of credit information on items which were never associated with the individual in question, items which may be related to an individual but are reported improperly or items which may be attributed to the individual but should no longer be reported on a credit report. Important personal items are often miss-reported as well including ones address, social security number and employment history. Everyone should check these personal items as well when reviewing the accuracy of the credit report. Federal law sets the limit on reporting items of negative credit at 7 years except the case of Chapter 7 bankruptcy where the limit extends to 10 years.

Credit Repair

If one discovers inaccuracies on their credit report responsibility lies with the individual to begin the corrections process. Letters must be written explaining exactly what the problem is and the remedy they feel warranted. Especially when dealing with inaccuracies individuals must remember that each credit reporting agency maintains its own database of information. Therefore one agency might report an item properly while others report it improperly and vise versa.  Furthermore, if a common inaccuracy exists with multiple reporting agencies the repair process must take place with each agency reporting the item inaccurately individually. In many cases this means to remove an item that has made its way onto each bureaus agency report, an individual must write three sets of letters and follow the process through with all three different agencies in order to be sure an item comes off from the reports. Once notified of a problem an agency will contact the creditor or reporter of the item in question and seek a response regarding the accuracy of the item. Under the Federal Fair Credit Reporting Act if the agencies do not receive a reasonable proper response within 30 days they are obligated to follow your directives on proper treatment of the item.  Should a proper response be received the bureau may well request more information on why you believe your position be the correct one. Many people advocate dealing with only one item per correspondence. To extend this out given earlier facts that each item must be dealt with individually with each agency, a hypothetical result for someone with ten erroneous items could mean initiating 30 sets of correspondence to correct the problem. Once you find you have completed this task follow up once again or check the report again. Just because a letter has been written and a creditor has not responded within a given time frame does not mean that the agency will remove the report without further follow up and an additional correspondence. On the other hand keep in mind changes may take a month or more to appear on a report. While the process for proper credit reporting is in place, assuring accuracy of your own credit report rests with you.

Improving ones credit score is one of the few areas of life where doing nothing can be tremendously productive. Once the items causing negative impact on the credit report have ended, the simple passing of time does wonders for one’s credit score. While the advantage of improving your score with the passing of time comes in the form of non-existent effort, the disadvantage comes in that time must take its own course. Even those with the best of credit cannot buy more time or speed the passing of time.  Generally the date used to trigger the passing of time in this context starts with the date of the last activity of the account. Interpretation and misuse of this rule accounts for many reporting errors. For example if a person last made a payment on a charge card in 1995 and in 1999 a new entity buys the account and begins to report it the new entity the credit reporting bureaus may treat the initial reporting as the date of the new entity. But in reality the date of the last activity of the debtor’s point of view came in 1995 with the last payment. “Last activity” for purposes of credit reporting means the debtor’s last activity, otherwise by re-selling accounts or re-generating some new phantom activity the creditors reporting can be extended in perpetuity. To maintain the accuracy of records that should be dropped from account through passage of time, usually seven years as I referred to earlier, individuals should know the exact date of the last activity and have records for proof.

Credit Rebuilding

I cannot stress enough the importance of staying out of trouble as a credit-rebuilding tool. Even doing nothing can help a bad credit report, but repeating poor credit habits can make things much worse. Creditors can be somewhat understanding of a bad credit incident, if corrected. This can be particularly true when the bad credit originated with problems outside of the debtors control such as emergency medical bills. Repeated bad credit behavior indicates a problem with deeper roots and looks to be a stronger indication that future credit worthiness looks shaky. If you want your credit to improve, be perfect with your new credit, as well as old credit where accounts remain open.

To accelerate the rebuilding process try to have at least three active credit lines open, and be perfect with them. Car loans or mortgages count if you still make payments, as well as old credit cards if they can still be used. If you need to obtain new credit store cards or gas cards can be easier to obtain than major credit cards. If even those fall beyond reach, any one can be accepted for secured credit cards. Make sure when taking a new credit for rebuilding purposes that the creditor reports to the major credit agencies. Not all creditors submit information to the credit bureaus, and almost no debit card or check card issuers do, even ones with a MasterCard or Visa logo. Use the credit you have obtained and make your payments on time (did I mention I can’t stress this enough). On time means never being 30 days late. At fifteen days you may pay a late fee, but late items must hit 30 days overdue before they will be reported. Using credit does not mean abusing it, you need not run the card up to its limit. On the other hand, leaving the card in your wallet will not help rebuild your credit as much as positive usage. A service I have seen claims they will report your rent payments to the credit reporting agencies. Potentially this could accelerate credit score rebuilding.

Scams, Fraud and Improper Credit Repair

One does not have to look far to discover companies claiming they can repair your credit for you.  Some of these companies will legitimately help to repair erroneous items on your report others fall into the category of con artists and crooks. This evil group starts off with the out right thieves – companies, which offer the world, take your money and do nothing. Avoid these by checking references including organizations such as the Better Business Bureau when applicable; question how long they have been in business and pay attention to what they’re telling you. If their claims sound to good to be true you may wish to be on the defensive. When possible attempt to verify answers they have given you with independent sources. Ask how much time credit repair takes. No one telling you credit repair happens instantly should be trusted.

Some organizations claim they will issue you a new social security number or create a completely new credit profile for you. Organizations of this type fall into one or two categories, those who are scam artists and liars and those who are operating illegally. Even if an entity some how could create a new credit profile for you such an action would be completely improper under the law. I personally recommend that any organizations make claims of new social security numbers or new credit profiles be avoided. Some credit repairs organizations do follow the rules and understand the system. Even with those who are attacking items on a credit report using the proper procedures can sometimes go too far. Either at the request of the debtor or the suggestion of the credit repair agency some companies will wage a war with the credit bureaus concerning legitimate items in the hopes that the creditor either ignores the correspondence or gives up on the paperwork required with the result that legitimate bad credit items end up removed. I personally would advise anyone considering such an endeavor that attempting to remove proper items can constitute fraud and avoid any such actions.

Conclusion

No one needs to allow a bad credit report to hang over their head. Some people may feel comfortable working with credit report issues on their own while others will need help from books, web sites, professionals or you may wish to try our own free credit repair and credit rebuilding step-by-step guide.  Only ignoring the situation or falling victim to a scam would be bad approaches. Individuals must decide based on their own knowledge and skills what works best for them. In any case, within a year or two of concentrated effort, even the worst bad credit can improve to very high levels. In the mean time, many bad credit loan options exist.  Bad credit need not put your entire life on hold in either the short run or the long run.