How To Repair Your Credit In a Year’s Time

Have you ever thought ‘why bother’ when it comes to repairing credit that is less-than-perfect? For many consumers, the financial situation looming before them is so overwhelming they’d rather do nothing than get started. Credit repair is a time-intensive process but a necessary one to promote financial stability. If you think you don’t have the time to repair your credit, you need to think again.

Credit scores have declined across the board in recent years thanks to the recession and the high rate of unemployment. But many consumers are starting to fight back and take a more active approach to getting their finances back on track. It will take time to get the job done as there is no easy way to repair credit overnight.

The following timeline will give you an idea of what it takes to repair even the most damaged credit. There is no one right solution for everyone but if it can help motivate you to consider your own credit situation, there is no time like the present to get started.

During the 1^st month:

• You’ll need to get a copy of all three credit reports and scores.
• Review your report information and report inaccurate data and incidents of fraudulent use to the credit bureaus.
• Keep copies of your dispute claims filed and mark 30 days from the date you sent the information to the agencies on your calendar.
• Create a file folder where you can store all documents and correspondence received.
• Review and revamp your current budget to ensure you can meet all financial obligations.

During the 2^nd month:

• Replies from the credit agencies will begin to arrive. Read and file them immediately. Take any action necessary to satisfy requests from credit reporting agencies.
• Prepare any letters to original creditors or debt collection agencies requesting validations of debts you don’t believe to be accurate. Keep copies of all your letters.
• Review monthly budget and begin to set up automatic payments with creditors to avoid penalties and late fees.
• Check back with the credit reporting agencies on any disputes not yet confirmed.
• Continue filing correspondence information in file folder.

During the 3^rd, 4^th, and 5^th month:

• Continue following up with creditors and debt collections about the balance owed and make payment arrangements to satisfy the debts in full once the debts have been validated.
• Request all payment arrangements to be confirmed in writing. Make a copy of all correspondence for both your original creditor file and your credit report repair file for easy accessibility.
• Continue meeting all regular payment obligations on a monthly basis to improve credit history data and scores.

In 6-12 months:

• After all correspondence has been received concerning credit disputes, make sure to request a copy of your credit reports to ensure the information has been changed.
• Contact any creditors who have not updated information within the first year of improved account history.
• Continue updating budget to reflect changes in balances.
• Do not close out accounts once balance has been paid in full for all credit accounts as doing so can drop your credit score. Be selective in which credit accounts to keep active depending on the length of time the account has been in use.

Staying On Track

Once you have made the efforts to repair your credit history and boost your score, it is vital you learn from your previous financial mistakes. Better personal finance management tools like budgeting and expense tracking are necessary for ongoing financial management.

You also need to spend within your limits and pay off your credit card balances in full each month. Impulse buying and unnecessary credit spending outside of your income limitations will put your credit right back into a bad place.