Credit repair is defined as the process of eliminating, unfair or unpaid dues from your credit report. Credit firms all over America charge thousands of dollars for eliminating bad debt, and to carry out credit repair. However before you go any further the first thing to understand is that you should go to a professional firm only if you feel you cannot carry out credit repair on your own, government agencies encourage individuals and businesses alike to dispute negative items on their own, before they go and hire credit firms. Before we go any further, please note that credit repair as such is termed as controversial practice, as some of the techniques involved are not always completely ethical.



The first step in credit repair is Getting a credit report, under US law, you are entitled to a free credit report every year, there are three major companies that offer a credit report free of charge these are Equifax, Experian and Transunion. Before you can carry out any credit repair, you need to go out and get all three credit reports (sometimes you will be surprised by the difference in the three reports). Once you have obtained the three credit reports, go through them thoroughly, and check to see if there are any discrepancies, if a negative item is marked on one report and not on the other, or if the amount varies from report to report, mark those out clearly for further investigation. Also make sure that all negative items add up, i.e. They have the same amount due, liability etc.

Disputing negative items

A negative item on your credit report can be an overdue payment, a bankruptcy, an IRS red flag, and even things like repossessions. Every credit report you receive, irrelevant of the firm clearly mentions the status of the account (if it is close, over due or paid off). It also mentions the account company's name and the address, if there is no telephone number provided, you can always trace the company using the internet or a local directory.

The first step in disputing negative items is figuring out which negative items to dispute, don't get carried away and dispute all negative items on your credit report (stuff like a recent bankruptcy and a court judgement are one of the most difficult things to dispute, and you should only think of attempting to dispute these if they are genuinely wrongly reported). Make a list of the negative items that you want to dispute. Once the list of disputes to be made is ready, you can start working on writing the letters to the credit company, with an explanation as to why you want to dispute the item.

The dispute letter to the credit company should be short and sweet, it should not be more than 300 words in content and should usually be a letter that requires the credit company to confirm its receipt. Any dispute that is not investigated or answered to within a stipulate time period, has to be removed from the records. So the smart thing to do here is to apply at a time when there is a massive influx of disputes and to keep copies of everything you send to the credit company. Remember that you might not get a positive response the first time around, simply keep plugging away at the credit company till you get a positive response.