Facts For Consumers About Credit Repair

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Due to the economic downturn and the many problems that people have faced with high unemployment numbers, loss of value in the housing market and just the general difficult economy, many people are interested in doing whatever they can to repair and improve their credit.

The FCRA or the Fair Credit Reporting Act was established back in 1970 to protect consumers from the problems of inaccurate and erroneous credit reporting. At this point many banks and lenders are wary and many are increasing their standards for making loans. It can be difficult for someone with perfect credit and it is exceptionally difficult for those with less than perfect credit. Add to that the fact that many employers are now using credit reports in the hiring process and credit repair becomes even more important.

If you are thinking about credit repair here is a summary of the first steps you should take.

1. Obtain a credit report from all three of the main credit reporting agencies. In the United States they are Experian, Equifax and TransUnion. You can get one report for free one time each year by going to annualcreditreport.com or by calling 1-877-322-8228.

2. Review each report line by line, checking carefully for any type of inaccuracy.

3. Upon identifying inaccuracies, you will need to send in a dispute to the credit-reporting bureau. In the dispute, you will need to clearly explain what exactly and why you are disputing the item. Attach any documentation to underscore your point and make sure that you keep all of the originals and send in the copies.

4. Write a letter to the creditor who reported the misinformation with the same information that you sent to the credit-reporting bureau. Both the credit reporting bureau and the creditor will have 30 days in which to verify the accuracy of their reporting or they will need to delete the bad information.
You can also improve your credit rating by applying for new credit, by either applying for a regular loan or credit card or if you are unable to qualify for that by applying for a secured credit card or loan.

Paying off current debt is also a good idea as it can significantly lower your debt to available credit ratio and that can greatly improve your credit score.