Bad Credit now what

It seems like every time you turn on the TV or radio you are bombarded with advertisements for companies that will, for a nominal fee, legally restore your less-than-sterling credit history. It sounds so good…an alternative to bankruptcy that costs less, and will actually improve your credit. Well your mother was probably right when she told you that watching too much TV will rot your brain, but she definitely knew what she was talking about when she told you that anything that sounds too good to be true, usually is.

What these companies do not bother to make clear to the average person is that by paying these companies the “nominal” fee they charge, you are simply paying for convenience. The reason for the existence of so many of these companies is there are many people in who are desperately in debt. Since everyone with the capacity to sign a contract may begin doing so at eighteen, a lot of people start their credit history off with a bang, opening several credit accounts quickly, only to have it all blow up in their face when they are suddenly faced with bankruptcy before they graduate college. Student loans notwithstanding, credit, like anything else that is a privilege of age, must be treated as such.

Please note that I am not referring to debt consolidation companies. I am referring to companies who claim to be able to go in and basically erase your credit history. Unfortunately, it simply can’t be done legally. However, with much patience, diligence, and ingenuity, you can “clean” your own credit report, and save yourself a lot of money. Here are some tips and tricks to help you get started on your way to a better financial future.

1. Order a copy of your credit report.

There are many options for obtaining your personal credit report. The cheapest way is to go to, and order a report from all three of the major credit bureaus. Due to a law passed in 2005 to assist consumers in understanding and being able to protect and rebuild their credit, Trans Union, Equifax, and Experian will all provide a credit report once annually to anyone with a credit history at no charge.

In order to be able to obtain the reports you will have to provide your personal identifying information, including your name, social security number, date of birth, etc. Please be aware that you will also have to provide more detailed information such as past addresses, bank accounts, counties of residence, for example. You will have to prove you are who you say you are.

There are the usual legal disclaimers to wade through, as well as an affidavit stating that you are the person for whom you are ordering the report. There will also be a plethora of different offers for credit monitoring services and those debt consolidating companies I referred to earlier. Somewhere on the page is a link, probably almost unnoticeable with all the ads, that will take you straight to the free credit report, bypassing all those advertisements and offers.


2. Enroll in a monthly credit monitoring service.

Ok, I just advised you how to bypass the credit monitoring ads, and now I’m going to tell you how to use them your advantage. There are several advantages I personally have benefited from. First, I get a monthly, automatic email telling me when my credit report updates. I also receive email alerts between the automated email if there is any kind of change to my credit report. Second, when I get these reports, they are updated for ALL THREE of the major credit bureaus. I get a brand new credit report and updated score each month from all three bureaus. I can compare all three report side-by-side. I get my updated composite credit score, and have an updating chart that shows the progress of my score. There are options for disputing inaccurate information. I have access to several phone numbers and addresses of different government organizations regarding credit laws and rights.

Those are just some of the highlights of what I get. I also wound up getting a pretty good credit card from a link on my account page. (Please note: I DO NOT advise taking advantage of very many of these ads at all. I have found most of them to be either dead links or leading off on some wild goose chase, destination Something to Buy. You do not want to continue to damage your credit). Enroll in email and text alerts if they are available. This will remind you to check your credit report, and it will alert you to any changes made. The cost is usually minimal (I pay $9.95 a month).

3. Carefully read over your entire report.

There will almost undoubtedly be several versions of your name, current and past phone numbers and addresses. For women who have been married, you will probably see varying versions of your maiden and married names. Your spouse’s name will likely be included, as well as any ex-spouses. Your address will probably be listed many different ways, depending on how many times you have applied for credit and how careful the person entering your information into the database was. The next set of information you will see might be a general breakdown of the dollar amount of your debt, in categories such as real estate, revolving debt, etc. Then you will likely see a detailed list of every creditor you have had for the past seven years. There will also be any accounts that, although opened more than seven years ago, were only reported as delinquent within the past seven years. You should be aware that old debts only fall off seven years after they are FIRST REPORTED AS DELINQUENT. You should expect to see any debts still owed, collection accounts, and any current revolving accounts. You can also expect to find any old medical bills, bank and other accounts.

Each one of these account records are supposed to include the name of the company reporting the information, and include an address phone number, account number, type of account, current status of account, date opened, date closed, if applicable, date first reported, high balance, low balance, account maximum, over-limit or late charges, and current balance. Beneath this list should be a chart detailing the history of the account status. (Consider it a miracle if even one of the accounts has every single piece of information. Assume you are dreaming if all the information is correct.) Then there is usually a separate score for each bureau, with a single composite number, indicating your “credit score”.

4. Dispute, dispute, dispute.

To tell you to dispute everything would be a bit pat, but it can’t hurt. I went through my credit report and disputed every instance of my name that was a duplicate. I did this with all my past addresses as well. I also disputed one address that was just spelled wrong (hey, it’s not the name of any street I lived on, right?), and an address and phone number that I had never heard of. All of these items were deleted from my report. If nothing else, it made the report less cluttered and easier to read. Then I disputed an old bank account record that reported I still owed on the account. I filed the dispute explaining that the account had been closed, and when, and it too, was deleted from my report. I had my ex-husband’s name removed, because it reported him as being my current spouse. I disputed anything that was not absolutely correct, literally down to the letter.

5. Start calling the debt collectors.

Yes, you did read that correctly. Call them, surprise them by volunteering your current address, phone number, job, etc. Taking that very first step and contacting them will actually impress them, and it will score you some brownie points if it ever comes to having to ask for an extension on a payment. Once you have gotten in touch with them, you can establish a payment plan that will keep them from garnishing your wages, and still allow you to be able to put food on the table. (Not always so with debt consolidation, by the way.) After you have established a payment plan, you can set up a system discussed later that will make organizing your bills a breeze. Don’t forget to keep notes on your conversation with the customer service representative, including their name, the date and time, the number you called, and any pertinent information you are able to obtain.

Find out who your account representative is (it will usually be one person) and establish yourself with them. Tell them your current financial situation (only as much as they need to know, of course) and work with them to focus your realistic goals for settling the account. Keep them updated, and call them ahead of time if you see you will need an extension. Keep in mind that most collections departments will be willing to accept a settlement, especially with regard to more substantial debt. However, please note that a settlement will be posted to your credit report as just that, a settlement for less than original amount. If this is not a concern for you (my credit score went up quite a bit because of several settlements) then by all means, accept the offered settlement if it is financially feasible. Otherwise, you will just have to continue to make the agreed-upon payments until the debt is paid in full, which will, of course, take longer. Depending on how substantial the amount owed is, it may wind up “falling off” your report before you get the balance paid.

6. Set up a system to organize your bills.

I have found several useful ways to deal with all the paper and headaches that come with paying bills:

*First, get a calendar. I would suggest one that has a week spanning two pages. This gives you plenty of room to write any notes about a specific day. Write down the due dates and amounts of each one of your bills, as far out in advance as you know them. Most of the time when you are on a payment plan for an old debt, you will have the same amount, the same day, each month. This makes it easier to plan ahead and write each payment date on your calendar. Once the payment currently has been paid, make a notation with the the date the bill was paid (or mailed), the payment method and amount, check number if applicable, and if possible, the balance, on the calendar and the invoice or statement. Be sure to include the confirmation code if paying by phone or Internet. You can also print the receipt page from the Internet. If paying by mail, always request a receipt. These examples of documentation will provide invaluable reference later, if for instance, you need to dispute something.

*Take an accordion-style file folder and attach labels at the top of each divider, in order by date. Then put the current statement or invoice in the correct section, according to its due date. Every day (remember I said you would need diligence?), check the pocket for that day each day for about a week ahead. Of course, if you have to mail a payment, it would be prudent to send it out about seven to ten business days before it is due to ensure it arrives by it’s due date. Don’t forget to seal the envelope and put a stamp on the envelope. Be sure to sign the check. Do not ever send cash; pay only by check, money order or cashier’s check. Make copies of everything. Keep everything you write down or is sent to you.

*Make a file for each account. Put any documentation in the file. Put invoices and statements in these files after they have been paid. Jot notes about the account on the folder. Use the folder to keep track of each of the payments. Just make sure to keep any pertinent documentation regarding each account. That scrap of paper that did not mean anything yesterday has just the information you need today. Do not take any information for granted. Sometimes you will have to be an amateur detective just to be able to find out how to contact the company to whom you owe a debt.

*Check your email every day. That may sound a bit overzealous, but most people do it anyway. I did not improve my credit score so drastically over a three-month period by sitting around wishing I had more money. Watch for alerts that a change has been posted. This is not necessarily going to happen only once a month. Most creditors tend to report around the same time every month and whichever credit monitoring service you subscribe to will probably do the same. However, not only can you use this service to help REBUILD your credit, but people with good credit use these services to protect theirs. These alerts will let you know if someone uses your name to apply for credit, or if someone tries to access your credit report without your knowledge. Which leads us to…

*Educate yourself. There are countless websites, government and non-, offering information of every kind on credit. A few of them I have found helpful are:

Common sense should tell you to be cautious, especially in regard to researching the Internet. There are always those willing to take advantage of the ignorance of others who will exploit your desire to rebuild your credit as quickly as possible to their nefarious advantage. Remember that ANYTHING THAT SOUNDS TOO GOOD TO BE TRUE PROBABLY IS. Check the accuracy of any information you find. Try to use government websites as much as you can. You can find and download forms, learn about laws and have access to countless other resources, straight from the official source. Check any business you decide to purchase any services or products from with the Better Business Bureau. Validate everything. You have hopefully learned by now that it is better to be safe than deep in debt.

*Finally, remember to be patient. This process takes a long time. I’m still working on it, and have been for about three years now. You have to possess a certain tenacity and persistence. Of course you must have the discipline to sit down and put hours into making phone calls and clicking the mouse. I have spent countless hours researching and studying, and calling and typing and checking and rechecking and sitting on hold. But, I am more willing to spend time than money. It is definitely worth the effort to get your financial life back on track, without having to spend even more money, and get yourself even deeper into debt.

It was so easy to get into, and yet seems impossible to get out of. Rebuilding your credit can be quite a daunting task. But in our society, for a person to have any kind of financial future, good credit is absolutely necessary. To avoid the inconvenience and dangers of having to pay strictly with cash, or to face the embarrassment of being turned down any type of credit account, restoring one’s credit history is essential. By merely following the guidelines above, the average person can turn their financial future around while spending little beyond what is required to settle their debts.