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Repair Your Credit Report the Right Way

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Repair Your Credit Report the Right Way

You have likely seen "Repair Credit Score" signs recently that promise to improve your credit score for a few hundred dollars. However, many people have reported these repair credit score companies to the FTC as scams. If you hope to repair your own credit score in a legitimate manner, there are certain steps that you can follow to complete this goal.

Order a Free Credit Report and Score

The first step to repair your credit score is to see where you currently stand. You have the right to receive one free credit report each year from each of the three main credit bureaus. Many people question, "Where can I see my credit report?" You can receive a credit report from annualcreditreport.com, but you will likely need to pay a nominal amount to receive your credit score. Other websites offer credit reports, but they are usually attached to a credit monitoring service that you must pay for.

Address Credit Report Errors

Analyze your credit report for any errors. According to statistics, three out of every four credit reports have errors on them. While some of these errors are minor, many of them can cause your credit score to be lower. Check for duplicates of the same information and any accounts that should be off your credit report by this time. Also, check for incorrect addresses or slight changes in your name for potential signs of identity theft. If you notice any material changes, write a detailed letter to each credit bureau with the pertinent information and attach any evidence that will support your version of events. Under federal laws, the credit bureau must report this information to the creditor and conduct an investigation at your request.

Set a Household Budget

Set a budget that your household can stick to. This budget should set limits on the amount of money that you spend on food, entertainment, household repairs, gifts and fixed expenses. After you establish this budget, you may find that you have more expenses than you are used to. If you do not know how much money you typically spend on certain categories, begin tracking your expenses to get a better idea of your spending habits. You may need to trim your expenses or increase your income if the current amount of your expenses is too close to the amount of your monthly income. Seek professional budget advice to receive tips on improving your financial situation and your credit score.

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