Credit repair is often times a very time consuming and frustrating process.
But, no matter the difficulty, fixing your credit is one of the most worthwhile and financially rewarding things that a person can ever do.
So lets take a look at 3 of the most common challenges consumers face when repairing their credit, and address how to overcome them.
1. Credit Bureau Stall Tactics
The credit reporting agencies (Experian, Equifax, and TransUnion) have developed a system of stalling the credit repair process and discouraging consumers from fixing their credit reports.
These stall tactics include sending letters which state that the credit bureau received a suspicious request to access your credit file, that the request you sent them was illegible, that they require additional documents to verify your identity, or that your request was deemed frivolous and will NOT be investigated.
Faced with such disappointing responses, consumers often times give up on their dream of better credit. Experienced credit repair services know that at some point during the credit repair process, the credit bureaus will use these tactics, so they are ready for them.
You should be ready for this response and at the first sight of a stall tactic, leverage your consumer rights, aggressively re-initiate the investigation and contact the CFPB. Use this to your advantage and put the credit reporting agency back on its’ heals.
2. Unauthorized Inquiries
Hard inquiries on your credit report can lower your credit scores, so it’s only logical that you limit the amount of new inquiries you incur. Not so fast, creditors can place hard inquiries on your credit report without your authorization or knowledge, costing you valuable points and increasing the time you have to spend repairing your credit.
To combat this, Do 2 things;
1. Monitor your credit report monthly and check for unauthorized inquiries. If you spot one, contact the creditor and ask them to show proof of permissible purpose for checking your credit report or delete the inquiry from your credit file.
2. Contact your current creditors (ones you have open accounts with) and ask them to NOT run your credit reports while your in the process of improving your credit.
3. Building Credit
Credit repair is not just about removing past derogatory accounts from your credit reports. It is also about showing creditors that you are capable of using your credit wisely and paying in a timely manner. Unfortunately, most consumers have difficulty establishing credit while trying to improve their scores. It may seem impossible to establish credit at the beginning, but you need to prove that you can handle debt, that you can keep a credit card at a low utilization rate, and that you can pay it on time every single month.
If your low credit score does not allow you to qualify for an unsecured credit card, try either applying for a secured credit card or asking a friend or relative to add you as an authorized user on their credit card. This will help you establish a positive trade-line and show prospective lenders that you have learned to use your credit wisely and responsibly.