I recently received this question from one of our readers:
I know that credit is a huge part of home buying. If I cannot afford to pay a credit repair company, what can I do myself?
This is a question I get asked frequently. In the current market a lot of people find themselves between debt and a hard place. They are working hard, but with the cost of living as it is, and the prices of homes rising, some might find it more difficult to hand over a large sum of cash for credit repair services.
Let me reassure you, this can be done yourself. What you should be paying for when enlisting the help of a credit repair service is nothing more than their time—because this process will take time—and their relationships. Since they do this often, they may have good relationships with various merchants and can possibly work a better payoff rate than you could going it alone.
Now let’s talk about how to actually get this process started yourself.
By law, you’re entitled to a free credit report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment; and/or one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate due to fraud, including identity theft.
Each of the national credit reporting companies — Equifax, Experian, and TransUnion —is required to provide you with a free copy of your credit report once every 12 months, if you askfor it.
Fixing your credit yourself doesn’t require a lot of tools or equipment. The most costly thing of all will be the time you have to spend, which will vary depending on the number of discrepancies, your documentation of them and the merchant’s cooperation.
First, examine your credit report and highlight any discrepancies you find. Second, you will want to search for any documentation you might have to support your claim. Third, notify the credit reporting company, in writing, of any information you think is inaccurate. Include copies (NOT originals) of any documents that support your position. Send your letter by certified mail, “return receipt requested,” so you can document that the credit reporting company got it. Keep copies of your dispute letter and enclosures.
It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Both the credit reporting company and the information provider (the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights, contact both the credit reporting company and the information provider.
Here at WLM Financial, we want to help you reach your goals of home buying, excellent credit and fiscal prosperity. We not only assist but educate our clients.