How Can I Repair My Credit Report When I Don't Understand It?

Repairing bad credit can seem like a slow and time consuming process. Patience and knowledge of how it didn't happen overnight is required. Understanding the credit system and how your credit reports are perceived through the eyes of creditors is crucial when you begin this process of improving your scores. Unfortunately, there are millions of Americans who learn too late just how the credit system works. Believe me - they end up paying the price for this lack of knowledge.

When a consumer asks the question, "How do you repair bad credit?" it's often after they've been denied financing for their dream home and then discover it's too late. Their income is sufficient and they're good people who deserve the opportunity to live the American dream. Unfortunately, their low credit scores are proving to be a major setback. It's only after leaving a car dealership or their bank after having been denied they realize their scores are too low. Either way, it's traumatic and heartbreaking. It prevents us from living the life we want to live.

The good news is that regardless of how bad your situation is, there are many ways to repair your credit. The first step is contacting the three major credit bureaus - Equifax, Experian and TransUnion. Request a copy of your credit report as well as your FICO scores so that you have a clear snapshot of where you are and can measure your progress as you move through this process.

Once you've received your credit reports, you'll want to ensure the information is accurate. Nearly 79% of all credit reports include errors. These errors can mean the difference of hundreds of thousand of dollars in interest. It's then you realize how serious this is.

Look for any negative accounts on your credit report that are inaccurate. If you are not 100% certain of an account's accuracy, highlight them. Any uncertainty or questions in your mind of whether they belong on your report, request an investigation. Include these items in a dispute letter to the credit bureau that is reporting the account.

Give the credit bureaus ample time to conduct their investigations. According to the FTC, thirty days is sufficient. Once you receive the results of the investigation, review your credit report again to what's been removed. If there are any items that have been verified, you can then forward a procedural request to determine what methods were used to verify the information. You will want to continue this process until you have achieved the desired results.

This is only method of credit repair and there are many more. Learning the steps to repair bad credit is a must for anyone suffering from a bad credit rating but wishes to improve it. After all, your credit rating is essential to your financial well-being and you should be willing to fight for it.