How to Repair Your Poor Credit Report

Are you struggling with bad credit? Learn the effective strategies insightful tips in this comprehensive guide on how to repair and enhance your credit rating.
A man holds an overdue bill in his hand while he talks on the phone with a concerned expression on his face

Poor credit can be the result of many different factors from poor money management to unexpected financial hardship such as losing your job or incurring a mountain of medical bills. No matter what situation you find yourself in, falling behind on your debts can negatively affect your credit rating.

If you run into an unexpected financial hardship such as a job loss or other reduction in income and begin to miss payments, what can you do to turn things around? How do you repair bad credit?

Look Into Consolidating Your Debt

When you consolidate your debt, you still have debt that will be reported to the credit bureaus. You’re merely swapping out one debt for another. Consolidating your debt, especially debt that is causing your credit score to go down, can help bring that number back up because of the following reasons:

  1. With a debt consolidation loan, you take your existing debt and put it into a new loan.
  2. You pay off existing debts with your consolidation loan, and they are shown as paid on your credit report, instead of late or in default.
  3. The monthly consolidation loan payment may be less than the total of your old debt combined. Your payments are easier to handle, so you are able to make them on time.
  4. As you make your debt consolidation loan payments on time, your credit report will start to improve and your credit score will increase.
  5. On-time payments on your new loan combined with paid off old debt will continue to repair your credit.

If you’re wondering how you’ll qualify for a debt consolidation loan when you have bad credit, there are lenders that work with borrowers who have fair and even poor credit. There are personal loans available for consumers with bad credit.

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File a Dispute with the Credit Bureaus

If there is incorrect information on your credit report, you can dispute it in writing to repair your credit. Even if something is accurate, you may be able to have the information taken off of your credit report by disputing it. That’s because the creditor is required to verify that the information is accurate.

Ask the Creditor to Verify Your Debt

The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate all claims of credit report inaccuracies within 30 days of receiving the initial dispute. If the information is found to be inaccurate, unverifiable, or false, the disputed item must be corrected or removed from your report.

Should you decide to dispute a claim that is accurate, you can do so by writing a letter to each one of the credit bureaus. You can let them know you’re disputing the claim, but beyond that, no explanation is needed. The agencies must then verify the disputed entry with the creditor.

What If Your Debt Can’t Be Verified?

If the creditor can’t verify the debt, it can be taken off your report. However, if the claim is verified by the creditor, it will remain on your credit report.

Another important aspect of filing a dispute is that if the creditor verifies that dispute after the 30-day time limit, the credit bureau can renew the dispute as long as you are notified at least five days before they do so.

Negotiate with Creditors

Dealing with creditors is not easy, especially if you’re behind on your payments. However, speaking to your creditors directly could be another way to get negative information removed from your credit report.

Stay In Contact With Your Creditors

Some creditors are willing to let a late payment or two slide if you continue making timely payments. If you stay in contact with a creditor and show a good-faith effort to keep paying on your debt and not ignoring your obligation, you may be able to avoid having negative information being added to your credit report.

Ask for Negative Information to Removed From Your Credit Report

If negative information has already been reported, you may be able to plead your case and ask your creditor to remove these claims out of goodwill.

Accurate repossession or collection account claims may take more time to remove and it’s likely you’ll have to pay the claim if you have not done so already to get that information off of your report.

Whether you’re looking to remove late payment claims or repossessions from your credit report, if you want to repair your bad credit, you’ll want to make sure you negotiate a deal before moving forward with the process.

The Bottom Line

Disputing information on your credit report is a step in the right direction for repairing poor credit, but there is no guarantee that these negative items will get be removed from your credit report.

Along with disputing claims on your credit report, working on building positive credit can also help repair your credit score.

AmONE can help you rebuild good credit by finding ways for you to bring past-due accounts current. AmONE can help you to identify ways for you to maintain payments on current accounts to put money toward those that are past due. Our knowledgeable associates are ready to answer your questions on money management, financial planning, debt consolidation, repairing bad credit, and more.