December 15, 2020

How to Fix and Repair Your Credit: A Detailed Guide

Having good credit is important for a wide variety of financial reasons. Lower credit scores can cost you hundreds or even thousands of dollars extra in interest rates and fees. Fixing or repairing your credit can give you access to more financial freedoms, better rates and the feeling of comfort knowing your financial health is thriving.

But before we dive into this topic, you need to understand that this can be a long process and you have to stick with it for the results to be shown. You’ll have to print documents, mail them out, wait for a reply, and repeat. It works, it really does, so don’t lose hope or give up. We’ll give you links to resources and templates to make it easier every step of the way. Ready? Let’s repair your credit!

Step 1: Get Your Credit Report

The first step towards fixing your credit is obtaining a copy of your credit report. This can be done online at credit agencies either once a year for free, or through a subscription for a monthly fee or one time purchase. The contact information for all these agencies are located at the bottom of this article.

Step 2: Check All Consumer Reporting Agencies

There are a ton of other reporting agencies that have your info. You’ll want to obtain a copy of your report from all of the consumer reporting agencies - including ones most people don’t know exist (See Reference 2 for a full list).

Most of these allow you to do this though an automated or live system - I’ll explain which is which at the end. It’s mind blowing what information they have!

Step 3: Check for Mistakes

You need to understand your reports - all of them! Read through each and every one. Look for ANY information that is misleading, invalid, or incorrect. Make note of anything that seems confusing or incorrect so you can reference it later.

Step 4: Add Security Freezes

In order to protect yourself from fraud, use credit freezes to make sure no one else is accessing your credit without your knowledge. Place a security freeze on your accounts through all the credit agencies you’ve identified.

If you have any public records like a bankruptcy, lien, or eviction, lock all of the reporting agencies that were referenced in Reference 2. You can click HERE to view more information about locking and freezing your credit, as well as fraud alerts.

NOTE: With security freezes, no one, not even yourself can access your reports. You can view the reports but can not apply for new banks, loans, credit cards, etc. You can remove the freeze after 14 days on average from the agencies listed in Reference 2 once you receive your pin in the mail. After that they can be unfrozen at any time and frozen again immediately. You also have the option to pause your security freeze during times when you need to access your credit for events like opening a new credit card, or applying for an auto or home loan. There shouldn’t be a fee associated with pausing a freeze on any account.

Step 5: Dispute Your Debt

Take a deep breath. You’ve done so much already, and you’ve made great progress. There’s more to do, but you’ve got this!

Here comes the fun part. You’re going to file your first dispute. This is called a verification of debt letter. Under the Fair Credit Reporting Act, you have the right, as a consumer, to have fair and accurate reported information on your account, and it is up to the CA (collection agency) to validate if the debt is real, owed, and accurate. See Reference 3 for a few templates you can use, but don’t worry much about that for now.

It is the debtors responsibility to verify the information, not yours. So you’ll write-in to the CRAs (credit reporting agencies) with this dispute. You will send it via mail to the addresses listed in Reference 1. Include a copy of your SSN and ID in your letters to the three bureaus.

In these letters, you will state that you are requesting the debt be validated or removed under the Fair Credit Reporting Act, as well as including all bills, payments missed, payments made, and original signed contracts.

Include EVERY DEBT that is not current and in good standing, even if it is a valid debt. Be sure to include public records as well as hard inquiries. It doesn’t matter if it’s legitimate or not, they have to verify the debt and respond back to you with their findings. You’ll want to have all this information to review and proceed in other dispute rounds. The credit reporting agencies are required to remove and block from listing any item that is not verified with sufficient evidence.

Here are two websites I use that are subscription based but give you the tools to do all of this without having to write the disputes yourself. It saves tons of time and energy.

Collection Shield 360 Collection Shield 360 has a basic version that makes you manually enter all info and only dispute one thing a month. If you’d prefer, you can sign up for a 2 month trial for $1, and it disputes 3 debts at a time, and autopulls and updates your credit. It works really well. It does charge $9.99 after the 2 months are up but it’s worth it, in my opinion.

Credit Versio Credit Versio is a bit more expensive, but it pulls your report from the three major Credit Reporting Agencies, creates the dispute forms for you for all three major CRAs and allows you to print and mail off (See Reference 1) as easy as that. If you want to use this product, you can access your Credit Report with it rather than paying for it from another company.

I’ve used both of these services. It costs some money, but this is an investment that makes the process easier. Keep in mind, all of this can be done for free if you take the time to do everything manually yourself. Otherwise, pay a little and these websites can help you work through the process more easily.

Under the Fair Credit Reporting Act, Credit Reporting Agencies are required to respond to each and every complaint, so having those two websites can be beneficial. You’ll have disputes being sent from three places:

  1. Websites (Such as those listed above)
  2. Mail (physically sent by you)
  3. Any free app you use such as Credit Karma.

Basically, you’re hounding them from multiple directions to clear up any unfair or inaccurate debts.

NOTE: Remember to check if the particular Collection Agency is licensed in your state. If not, they can not collect or report on your debt. Google the company name and your state to see if they have a license.

Step 6: Mail Your Disputes

Now you get to mail it off and wait! Make sure to keep copies of everything you send out for your records.

You’ll probably get tons of letters in the mail in response to this - from the Credit Reporting Agencies and the Collection Agencies. Review each and save them for your records.

NOTE: If the Collection Agency sends you a bill for “proof of debt validation” or sends anything other than proof of your debt, this is NOT enough to prove your debt. Respond by sending a letter to the Collection Agency requesting METHOD OF VERIFICATION.

Ask them what methods the Credit Bureaus used to verify the account (especially in the case of a collection account). Ask the Collection Agency what they sent to the credit bureaus to verify that the account was accurate and then ask them to validate the debt. You have to be persistent! This is a process and it is NOT QUICK! Sometimes, multiple letters will be needed along with multiple complaints! They do not make this process to be easy for you, but if you can get through it, you will be in a much better position. Please visit HERE for an example of how to request verification of a debt

Step 7: Verify the Changes

Wait 30-45 days and verify if anything has been removed from your credit. If so, that’s great! If not, that’s okay too.

BEWARE: If they send you something back, asking you to call and speak with them, DO NOT DO IT. If they ask for verification from you such as a driver's license number, Social Security number, date of birth, literally anything, DO NOT SEND IT TO THEM. They are trying to make you validate your own debt, don’t do it. Instead, send another letter, this time directly to the Collection Agency, advising them that all communication will be over mail. Then send them the same letter as before again.

Step 8: Send Second Round of Letters

At this point, you’ll want to send another round of letters. If a company sent you verification, you need to review it thoroughly. Make sure it is actual evidence of the debt owed. There are guidelines as to what qualifies. Please review The Federal Trade Commission website to review what qualifies. Make a copy of what they sent you and send it back to the CRAs with another round of dispute letters stating it does not qualify as validation and as such, you would like it removed and no longer reported to them. If they don’t send any verification, just send a letter saying they’ve failed to provide evidence in the time limit set-forth under federal law and as such, you demand it be removed and no longer reported.

You will continue this until it is resolved - this could take months. After the second round of letters to all agencies has been completed, you’ll want to review all documents, and proceed to file a complaint with the Consumer Finance Protection Bureau (CFPB) stating that the debt was not validated, and you demand it be removed. You can do this online at the CFPBs website. Send a copy of the letter to the CRAs and demand it be removed.

Reference 1

  • TransUnion P.O. Box 1000 Chester, PA 19022 1-800-916-880
  • Equifax P.O. Box 740241 Atlanta, GA 30374-0241 1-800-685-111
  • Experian P.O. Box 2104 Allen, TX 75013-0949 1-888-397-374

Reference 2

  • LexisNexis: 888-497-9172
  • SageStream: 888-395-0277
  • CoreLogic: 877-532-8778
  • Innovis: 800-540-2505
  • Factor Trust: 844-773-3321 (might be online only)
  • Clarity: 866-390-3118 (might be online only)
  • Microbilt: 800-844-4747
  • Advance Recovery System: 800-392-8911
  • Chexsystem: 800-887-7652
  • Early Warning System: 800-325-7775 (can’t be locked, request copy of records)
  • Telecheck: 800-366-2425

Reference 3 Here are the templates you can use. Be sure to include your SSN/DoB near your name at the top before you submit to the agencies.!AkO1rzU-uhdvmkAu5F9f31V173MT

Photo by Dylan Gillis on Unsplash

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.

EarnIn is a financial technology company, not a bank. Bank products are issued by Evolve Bank & Trust, Member FDIC. The EarnIn Card is issued pursuant to a license from Visa USA Inc.

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