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Self-Scoring and Fixing Your Own Credit Yourself
How You Can Dispute Key Derogatory Marks
That "something" you must do in this instance is to request your free credit reports from www.annualcreditreport.com, and download (or have them mailed to you) all three reports from the three major credit reporting bureaus in the U.S. -- TransUnion, Equifax, and Experian.
Once you have the reports in hand, 3-hole punch them and place them into a a 3-ring binder. Total cost: about $2. The feeling of having all your reports in one, easy-to-find spot: absolutely priceless!
Don't forget this: While you're at Wal-Mart buying the 3-ring binder, pick up a legal pad too. That will set you back another $2. But you'll be using that pad to keep notes and for writing down names of people you talk to on the telephone and tracking your progress. It will be another $2 well spent, let me assure you.
Now, there's some time-consuming, tedious tasks ahead of you. First of all, it's important to invest your time learning how to read your credit report and decipher the information found there. You need to make a list on your crisp new legal pad identifying items -- both positive and negative -- you've found on your credit report. But this will be time well spent once you have learned how to fix your credit score.
After compiling your list, you should rank each item according to the amount of damage it is doing to your overall credit situation. A simple system would be a "10" would be the most damaging, a "1" would signal a minor credit infraction.
You'll want to clean them all up if you legally can get them removed. But now you have a roadmap of where to start.
Rank the most damaging information first, followed by the next most damaging black mark, followed by what is considered neutral.
Do this for each credit report; each bureau report will vary one to the other. They may even have duplicate information. If this is the case, you will need to contact each credit agency individually for each duplicate item. Write down that note on your legal pad -- you'll be making plenty of "To Do" lists before this process runs its course.
Yes, it's a pain. It's a lot of work. But it will be worth it, and you'll be speeding up the process of improving your credit score.
When it comes to derogatory marks on your credit report, some entries are worse than others. For instance, a bankruptcy is worse than a foreclosure. A foreclosure is worse than having a car repossessed. And having a car repossessed is worse than past due payments to your favorite department store. Yes, all will affect your FICO credit score negatively. But knowing which entry is causing you the most damage on your credit report will help keep you focused on the task at hand: fixing your credit report.
Remember, not all items can be challenged for removal from your credit report. If you've filed for bankruptcy protection within the past 10 years and it's on your credit report as such, you cannot legally file a frivolous challenge to have accurate information removed from your credit files.
Keep a sharp eye out in your credit file for a duplicate entry. Use your dispute form to request these be deleted from your credit.
It's been estimated by some credit experts that 40% of credit reports contain errors, and you need to thoroughly search through yours to clean up your report.
Start by identifying incorrect accounts that are listed on your account, perhaps incorrect information reflecting missed loan payments you are certain are wrong.
I've found plenty of incorrect duplicate entries on reports due to bank mergers. There would be two exact loan amounts and one would show unpaid, while the other showed paid as agreed. It turns out that there were different loan numbers due to the convergence of computer systems after the bank merger, but the same loan.
The solution: A quick dispute letter and WHAM!, the incorrect entry was gone.
Derogatory information that's made its way onto your credit report must be removed after 7 years, and "hard" credit inquiries (from firms you've requested credit from) will stay on your report for 2 years. After that, they need to be cleaned up and thrown off the report. WHAM! We're making progress.
One important note: if one of your creditors has not taken it upon himself to notify you that he recently submitted negative information onto your personal credit report, he could be in violation of the Fair Credit Reporting Act, known as FCRA.
Alerting the original creditor of his being in violation of FCRA is a powerful way to get that original information axed from your report.
But for now, you've got the raw materials to start disputing and deleting outdated negative entries from your credit reports, and cleaning up your credit history yourself. Don't throw away your notes from your investigations or from phone calls you make.
The process of disputing errors in your credit files takes time, and you'll receive a lot of letters and new, updated credit reports for that suddenly bulging 3-ring binder you bought just a few weeks back.
You are now started down the road toward getting better credit, so keep track of where you've been and the good things you've accomplished so far.
For more information, read: "How To Read & Understand Your Credit Report"
Need a free copy of your credit reports? Click here to find out how to get your free credit reports online.
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