Getting financially fit is a popular New Year’s resolution, but where to begin? The foundation of any sound financial plan is a good credit score. It doesn’t matter if you have bad credit, average credit, or even excellent credit.
The majority of Americans have room for improvement when it comes to their credit history. And having a better credit score helps you get better interest rates for new credit cards and loans — helping you save money in the long run.
Here are our six tips for improving your credit score now and throughout all of 2019. Some tips you can start implementing right away while others will catapult you towards long-term credit health. And we promise they’re all easier than going to the gym!
1. Stop the Collection Calls
One of the biggest hurdles most people face when it comes to fixing their credit history is just getting up the nerve to start the process. When you are constantly harassed by debt collectors, it can feel difficult if not outright impossible to move forward.
They are required to follow certain laws as dictated by the Fair Debt Collection Practices Act, or FDCPA. For example, they’re not supposed to call you before 9:00 a.m. or after 8:00 p.m.
Additionally, they’re not allowed to threaten or mislead you in any way. But even if the collection agency does follow all of the legal protocol, it’s still a pain to deal with when you’re not dictating the channels of communication on your own terms.
Take the time to write a cease and desist letter to make an official request that all communications be handled through mail only.
This will not only give you valuable breathing room, it will also establish a paper trail that you can use when you start repairing your credit.
You’ll also have the time and energy to deal with your finances on your own terms without having to jump every time the phone rings. Get in control of your collections so you can get on the path to better credit.
2. Review Your Credit Reports
Now that you’ve stopped bill collectors from constantly calling and harassing you over the phone, you can turn your attention to reviewing your current credit report. The first step to improving your credit is knowing where you stand.
Each year you can get a copy of your credit report from each of the three credit bureaus for free. You can also receive a free credit report if you are denied credit or employment based on information found in your credit report.
While you are not entitled to a free credit score by the government, Lexington Law offers a free credit score as well as a free credit consultation. You can reach them at 1 (800) 220-0084. Otherwise, you can pay to get access to your FICO score or check to see if your credit card company or bank offers free access.
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Because TransUnion, Equifax, and Experian may not have the same information reported, it’s essential to order all three credit reports to get a full picture of where you stand. Some creditors may only report to one or two credit reporting agencies instead of all three.
Later on, as you keep your credit report clean going forward, you may want to stagger your free requests in order to keep a current picture of where you stand throughout the year.
If you’re about to apply for major credit like a car loan or mortgage, you may want to check all three credit reports at once as part of your preparation. Once you have your credit reports, highlight the entries that are currently negatively impacting your scores and get ready to prioritize.
3. Identify Your Biggest Problems
If there are any errors in the way negative information is reported, such as the dates, the amounts, or other discrepancies, you can dispute these items both legally and ethically.
Likewise, prioritize finding errors in credit card collection accounts, and charge-offs as severely delinquent payment history generally impacts your credit scores more than a single late payment. But, you can also dispute late payments as well. If you’re unsure of where to start or feel overwhelmed by too many decisions, talk to a credit repair company.
Like we mentioned before, you typically get a free consultation where you can actually talk about your specific situation. Some companies offer you advice on how to tackle disputes, while others let you take the lead on choosing which items you’d like them to target.
4. Double-Check for Zombie Debt
As you are going through your credit report, pay attention to the dates and confirm that any current negative items are still eligible to be listed on your account. Re-aged accounts may be listed with more recent dates that are inaccurate.
In fact, this is a common tactic that collection agencies use to try to force you to pay for a debt that is past the reporting limit. In some instances, the statute of limitations may have passed on this debt for collections in your state.
In cases like these, disputing the debt is your best option, as paying the debt may have little to no impact on your credit scores whatsoever.
Plus, the credit bureaus may only list information that is accurate and verifiable. It’s not fair or legal for them to list old debt. It’s your responsibility and right to get zombie debt dropped off your credit report for good.
5. Get Prepared to Dispute
We’ve written up several guides on disputing erroneous information on your credit reports, but if you need a simple refresher, here’s what you need to do:
- Send a certified letter requesting debt validation from the creditor.
- Wait for a response.
- If no response received within the 30-day timeframe, file a dispute with the credit bureaus asking them to remove the inaccurate debt.
- If you receive a response, you may still be able to dispute if the information provided is incomplete or inaccurate.
6. If It’s Too Much to Handle, Hire a Pro
However, keeping track of the laws, timelines, and written disputes can often be a hassle. If you’re worried about handling it yourself, speak to a reputable credit repair specialist to get yourself on track.
Often, these paid services can handle everything for you, which means you have more time to focus on enjoying your new found financial freedom. If you need help choosing a reputable credit repair company, take a look at our reviews and recommendations to find the right company for you.
There are programs to fit a variety of budgets and credit help needs so you can find something that works for you.
Rebuilding your credit isn’t an overnight job, but the results are lasting and worthwhile. Not only will you feel a calming peace of mind knowing that your financial past is laid to rest, but you’ll also be able to look happily towards your future.
Everyone makes mistakes from time to time, and luckily, it’s entirely possible to repair the damage within a reasonable timeframe. By following each of these five steps, you’ll have the knowledge and the power for great credit moving forward.