Do You Need the Help of an Outside Company to Improve Your Credit Report?

You can use one of the many companies that advertise that they can clear up your credit report. But be aware, some of these companies may be scam artists. For those legitimate companies that actually provide the service, it comes at a cost. These companies are not doing anything that you could not do yourself.

Below you can find the steps that are needed to improve your credit report:

To begin, you need to be aware of the basics: There are only three credit-reporting agencies that companies use to report your debt and payment history and to check on your credit. These are Equifax, Experian and TransUnion. Along with the information provided by your creditors, these credit-reporting agencies also, access your public records. This means that not only your debts but also, any judgments, garnishments or bankruptcies that you have will also appear on your report.

There is a time limit on how long this information can remain on your file. It is usually seven years for most debts and ten years for bankruptcies. The same information about you does not necessarily have to appear on the report that each company has for you.

Now that we have the basics out of the way, we can begin to improve your credit report.

Imagine how much information each of these companies receive each day. It is not hard to understand how there may be quite a delay in removing old information from your file. It is also not hard to understand how mistakes can be made, not only by the reporting agency, but also by your creditors. You can improve your credit report by removing the outdated information and correcting the erroneous data.

The first thing that you will need is a copy of the credit report that each agency has on you. Current law gives you the right to get one free credit report each year. The best place to go on-line to get a report from each agency is www.freecreditreport.com. This site gathers basic information from you and then will link to the individual sites. Remember you are entitled to a free report. You are under no obligation to purchase any other service from these sites. You are also entitled to a free credit report if you have been denied credit within the last 60 days. For this report, you would contact the agency that provided the prospective creditor with the information.

After receiving your credit reports, look over each of them carefully. Mark clearly on the report any instance of outdated or erroneous information. Make sure all the creditors listed are indeed your creditors. Sometimes if you share a name with someone or someone has stolen your identity, his or her bad debt becomes yours. If the creditor is a legitimate one, make sure the total amount owed agrees with your figures.

Make a list of all the items that you have marked. Most credit reports list contact information for the creditors. The next step to clearing your report is to contact all the creditors that you have listed (except the outdated ones). You first need to try and clear it up the error with them. Contact each, by mail or by phone and convey the problem to them.

For the outdated information or if you have not been able to resolve the uncovered errors with the company that reported it, you will need to write to the reporting agency that has that information on file for your. Write the agency a letter detailing the mistakes in your credit report. Ask them to remove them. They will then have a record on file that you have disputed a debt. They will also remove any outdated information and contact the other creditors involved to clear up the matter.

Next, pay off your debts. Most companies are willing to work with you. They are more interested in receiving their money then in taking you to court. So contact your creditors and try to work out a reasonable payment plan. Start with those debts that charge the most interest.

Remember to keep up your current bills. In times of financial difficulties, people tend to put off utility bills. Utility companies also report to credit bureaus. By showing that you can maintain your current expenses while paying off old debt, you can improve your credit rating.

It usually takes a year or longer to improve your credit rating. During this time, you should refrain from seeking additional credit. This is because even applying for credit can have a negative impact on your credit rating.

After you clear up your credit report and improve your credit rating, rethink how you have used credit in the past. The best way to maintain a good credit rating is to use credit wisely.