The first step to fixing bad credit is to get a copy of your credit report.
The first thing you will probably think to do is google the term “free credit report”. While this seems like a logical thing to do, be careful! Most of the sites that will come up are not free at all. They are sites that will give you a free report but then charge you monthly for “monitoring” of your credit.
Now, these services can be great if you are undertaking a credit report repair campaign, but you need to understand what you are getting. You don’t HAVE to pay to get your credit report!
Under the Federal Fair and Accurate Credit Transactions (FACTA) Act of 2003, Every American is entitled to a free credit report once a year. You can get your report from all three bureaus at once, or stagger your request throughout the year. (Staggering your requests makes sense if your credit is fairly good and you are simply looking for errors.)
The ONLY place to go to get this free report is AnnualCreditReport.com.
I got mine just this week and it is a fairly easy process that can be done online. They don’t even ask for a credit card. The only thing you have to watch out for is not exiting out of your browser as you finish one bureau and go to the next.
(Some of the bureaus will even let your dispute online from this system, though this is not always the preferred method because it doesn’t always provide you with the documentation you will need later.)
The only downside to the free annual credit report system, is that it doesn’t provide you with a credit score. If you are looking to repair your credit report, it may be difficult to track your progress unless you know what your score is.
To get your credit score, you will need to either pay for a one time report with a score or enroll in one of the bureaus credit monitoring services. Credit monitoring services will monitor your credit report and score on a monthly or quarterly basis, and alert you of any changes. Some of them also have modules that will allow you to play “what if “ games with your score and will make recommendations to improve your score.
If your credit is perfect and you don’t plan to apply for credit, you may have no need for such a service. However, if you would like to optimize your score in advance of applying for a major loan or are working on credit repair, these services may be useful.
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Fixing bad credit can be a daunting task. Many people are confused about whether they should tackle credit repair on their own or hire a credit repair company.
Most of you know that I am a big fan of getting the education you need and repairing your credit on your own. That is why I started Credit Repair College’s weekly video training membership site.
I firmly believe that this is the best path of long term credit restoration and is also a great choice for people seeking fast credit repair.
But, taking the time to learn everything you need to know about credit repair, isn’t for everybody. Some people don’t have the time or patience to deal with credit restoration. Others just can’t get comfortable working on their credit because they feel it is “over their head.”
If you are contemplating hiring a credit repair company, it important that you take the time to research and make a smart decision.
The first thing to research is their reputation. Have they been around a while or is their credit repair business new? What do other clients that have worked with them say about their services?
One of the best things you can do is find a friend or co-worker who has worked with a company and has had a good experience.
Another thing to consider when choosing a credit repair company, is if they are a law firm or just a regular credit repair firm. While there is no guarantee to avoid being scammed anywhere, it is probably safer to go with a consumer advocacy law firm like Lexington Law. They have an established credit repair business and are one of the oldest consumer advocate law firms in the U.S.. Many my rent to own clients have had great success with them. (For more information on their services Click here
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Make sure you have a clear idea of the strategies that will be employed before you sign up. If a company starts talking about things like file segregation or piggybacking off of a non-relative, RUN! These things aren’t legal and could get you into trouble. Also if they guarantee their results, this should raise concern. They aren’t in control of what can be removed from your credit file, so how can they promise specific results?
I would also steer clear of any company that tries to collect their full fee up front. They obviously don’t believe that their services will justify continued payment, so they are attempting to get all the money now! Most companies will have some sort of set up fee, but it shouldn’t be the total fee for credit repair.
By asking the right questions, you can begin to sort through the many credit repair companies out there and make the right choice for you.
And, if you would like to tackle it on your own, remember, we are always here!
By the way, one of the most important part of repairing your credit is making sure you get all of your finances in order so that you don’t end up back in the same situation. For Financial Planning Tips you might want to check out this article.
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