Listen… we’ve all made credit mistakes in the past.
Most people think that once you have bad credit, you can’t recover from it. That is far from the truth.
When it comes to starting your credit repair journey, there are a few things to keep in mind, and I’m getting ready to list a few of those things for you to make it easier in accomplishing your financial goals whether it’s to get better credit to buy a home, buy a car, or to just simply raise your credit score to get better credit card offers.
#1: There’s More Than One Way To Do Your Credit Repair
One of the great things about repairing your credit is that there’s no right or wrong way to go about credit repair. Now keep in mind that there are a few measures you want to take before you start making phone calls and firing off those letters.
There are some people who choose to hire a company to do the legwork for them and they just simply pay a monthly or one-time fee and watch the results roll in, and there’s nothing wrong with that. You’re more than welcome to do that if you’re that kind of person and have the money to afford it, but then there’s also the DIY way, which is the option I chose to repair my credit.
#2: Budget for Supplies
One thing to keep in mind as you prepare to start your journey is that you’re going to have to make an investment in supplies. Supplies will consist of everything from filing bins to postage. You want to be prepared for anything that comes along your journey, especially if you’re doing it on your own. When I started, I wanted to make sure that I had a space for every single letter, copy of credit report, return receipts, and/or certified mailing that I sent or received while I was repairing my credit. This involves storing all my documents and creating a filing system where I can keep track of everything that was coming in and coming out.
#3: Research the laws that protect you
One of the main reasons that we run into credit issues and errors on our credit report is that we may or may not be familiar with the laws that govern these companies and also protect us as well. As you progress on your journey, it’s very important to understand and know the laws that protect you. One recommendation that I will make is to research acts and laws for your knowledge and benefit. These laws not only include FCRA, FCBA, FDCPA, and FACTA, but also that statute of limitations for your current residing state, and state where you incurred the debt in some cases. All those laws that I just named are simply acts that govern the credit bureaus, lenders, as well as collection agencies. Once you become familiar with these acts, you’ll know what they can and can’t do. When I read through these acts and laws, I lit up with happiness seeing which one of my rights had been violated and having the documentation to dispute them. This reinforces the power you have to proceed with your credit repair journey.
As I mentioned before, you have to know the statute of limitations for your current residing state, and also the state where you have incurred debt. There are times where you may have thought that you can use the statute of limitations of the state that you are currently living in, but later on found out that you’re liable because of WHERE the debt was incurred, so it’s really important to research those statutes of limitations to avoid having to go to litigation with these companies.
If you’re still with me, great. We’re about to get to the good stuff.
You know those credit offers that you constantly receive in the mail to sign up for this credit card, that credit card, “you’ve been pre-approved for this,” “you’ve been pre-approved for that,” and so forth. Essentially, what’s happening is these companies are running what’s called a soft inquiry on your credit report, and they’re doing so because you haven’t been opting out of receiving prescreened offers. Although the soft inquiry doesn’t reduce your score, lenders use the brief information they get from soft inquiries to send off offers to get you to apply for what they’re offering. It’s a good recommendation to opt out of receiving pre-screened offers because you don’t want any distractions while you’re on your credit repair journey. As you start to repair and your score starts increasing, you’ll start to notice that the credit card offers are getting better, interest rates are getting better, and you’re starting to see offers that you’ve never seen before. That’s a sign of progress, and a motivator to keep going. During my journey, when I was able to refinance my auto loan with a single-digit rate versus the double-digit that I had in the past, I was excited. So excited that I took a shot at applying for credit cards again. Once I started getting approved, I started applying because I had got a rush from getting approved for something rather than nothing. As a result, it deterred me as well. Pre-screened offers may deter you from signing up for something that you made possibly did not need as this was my case.
Another reason to opt-out as well is because as you go through this process, you want to make sure that you protect yourself in every single way possible, and this is a recommendation that I make to everybody whether you’re repairing your credit or not. Living in South Florida, which is also known a the “Fraud/Identity Theft Capital” of the world, you want to minimize as much exposure to your social security number as possible. When you’re ready to start applying for new credit, it’ll be easy for you to be selective on the company that you want to go with by simply going to their website specifically, and run pre-screened offers on that website specifically instead of just receiving random offers from random companies. I’ve been a victim of identity theft at least 5 times within the past year alone, and it still continues. You want to minimize as much access to your credit profile as possible, which includes the pre-screened offers.
If you take only one thing from this article, this is it.
#5: Freeze Your Reports
On top of opting out of prescreened offers, another security measure that you want to take before you start your journey is to place a security freeze on your credit file with all 3 bureaus, Experian, Equifax, and TransUnion. Placing a security freeze on your credit files is the most simple and preventative measure you can take. All you simply have to do is visit the website of each credit bureau to place a security freeze on your report. You’ll fill out some simple demographic information, so they can pull up the correct credit file. Then you may have some identity questions to verify you based on the information that you entered in order to complete the security freeze. Answer the questions as accurately as possible to avoid getting flagged. If for whatever reason you run into some issues, you can always call the credit bureau to place a security freeze over the phone. One thing to keep in mind though is that you may be charged for placing a freeze on your credit file depending on the state that you live in. For example, in the State of Florida, they charge $10 to place a security freeze on your credit file. Ironic eh? There may be times where you won’t be charged a fee, for example, if you are a victim of identity theft then if you provide sufficient documentation like a police report indicating that you have been the victim of identity theft, many times you can submit that information to the credit bureau, and they can place an identity theft security freeze permanently on your report free of charge.
#6: Plan Your Strategy and Have a Goal
So before you get started on your journey one of the main things that you want to keep in mind is to have a cold. Why is it that you are doing this credit repair training? Is it because you want to buy a house, a car, do you just want better credit card offers? you need to have an end goal in mind and have that as your main focus as you do your credit repair. You don’t want to go through this and put all this work in to repair your credit and not having a specific reason as to why you are doing it. Once you have all your supplies and all your pretty words in hand then at that point you can go through your cutter would find out which information is incorrect which information is worth keeping looking at your credit report Page by Page and line by line and really figuring out how you can plan your strategies to repair your credit. If you realize that it may be something that you can’t do on your own or you prefer to hire someone to do it for you or hire someone to plan your strategy for you or even simply just write your letters for you you’re more than welcome to do that however also keep in mind that it will be an added expense that you may have to pay for but if it’s something that you’re willing to pay and if it’s an investment that you’re willing to make by all means go on ahead and do that to keep your peace of mind.