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Credit Mishaps

Rebuilding Your Credit


You can’t erase the past. Negative records such as bankruptcy and collection accounts will remain on your credit report for 7-10 years. But with a little work, you can improve your credit even before these negative records expire. Here are five easy steps you can take to rebuild your credit.

Step 1: Survey the damages

The first step to rebuilding your credit is to look at exactly where you stand. Don’t skip this step because you think you already know what is on your credit reports or are scared to see what may be reported. Bite the bullet and order all three of your credit reports and all three of your credit scores. Ordering online is simple, easy, and secure. Plus, contrary to popular rumors, checking your own credit data never damages your credit scores.

Print each report and review it closely. Highlight any negative records or inaccuracies that are damaging your credit score. Are all the accounts listed accurate? Do you understand all the information listed on your credit report?

Step 2: Check the expiration dates

By law, negative records must remain on your credit report for 7-10 years. The exact expiration date varies depending upon the type of record. Paying off an old collection debt or discharging your bankruptcy does not remove these records from your credit reports.

For each of the negative records on your credit report (including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records), look up the exact date they are set to expire from your credit report. You will likely see a major improvement in your credit score when these records expire.

Step 3: Dispute the errors

If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to dispute these errors. You'll need to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. Once your dispute is received, the credit bureaus have 30 days to investigate and determine whether or not to make the change you have requested.

Do not try to dispute accurate or positive information that is listed on your credit report. Accurate information cannot be removed from your credit reports and it is a waste of time to attempt to dispute these records. Disputing positive information may actually harm your credit scores.

Step 4: Start adding positive information

Now that you know when your negative records will disappear from your credit report and you have disputed any inaccuracies, you are ready to start rebuilding your credit. Since there is no way to remove negative information from your credit report, the best way to improve your score is to add new positive information. Open up a new credit card (or a secured credit card) and use it responsibly each month. Keep your balances low and always pay your bill on time..

Sign up for an online banking service that allows you to keep a close eye on your accounts. By not making any late payments, using credit responsibly, and avoiding unnecessary applications for credit, you are building a new history of good credit behavior on your credit report.

Step 5: Monitor your progress

It's easy to keep track of your credit score improvement with the new types of credit monitoring programs available today. Instead of just giving you occasional access to your credit report and email alerts, these new credit monitoring programs include unlimited access to your credit reports and credit scores, identity theft insurance, credit score monitoring, daily alerts, and more. Once you have signed up for a credit monitoring service, you will be able to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports.


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