Tackle Past Due Accounts

Your payment history impacts your credit score than any other factor - it's 35% of your score to be exact. Since payment history is such a large part of your credit score, having several past due accounts on your credit report will significantly hurt your score. Taking care of these is crucial to credit repair. Your goal is to have all your past due accounts reported as “current” or at least “paid.”

Get current on accounts that are past due, but not yet charged-off. A charge-off is one of the worst account statuses and happens once your payment is 180 days past due.

Accounts that are delinquent but less than 180 days past due can be saved from charged-off if you pay the total amount that's past due. Beware, the further behind you are, the higher your catch up payment will be. Contact your creditor soon to figure out what you can do to get back current. They may be willing to waive some of the late penalties or spread the past due balance over few payments. Let them know you're anxious to avoid charge-off, but need some help. Your creditor may even be willing to re-age your account to show your payments as current rather than delinquent, but you'll have to actually talk to your creditors to negotiate.

Pay accounts that are already charged-off. You're still responsible for a charged-off balance. As they get older, charge-offs hurt your credit score less, however, the outstanding balance will make it hard - and sometimes impossible - to get approved for new credit and loans. Part of your credit repair must include paying charge-offs.

If you pay a charge-off in full, your credit report will be updated to show the account balance is $0 and the account is paid. The charge-off status will continue to be reported for seven years from the date of charge off. Another option is to settle charge-offs for less than the original balance, if the creditor agrees to accept a settlement and cancel the rest of the debt. The settlement status will go on your credit report and stay for seven years. You may be able to convince the creditor to delete charge-off status from your credit report in exchange for payment, but this isn't easily done. The most important thing is to pay your charge-off and if you can get a favorable account status, it's an added bonus.

Take care of collection accounts. Accounts get sent to a collection agency after they've been charged-off or fallen behind several months. Even accounts that aren't normally listed on your credit report can be sent to a collection agency and added to your credit.

Your approach to paying collections is much like that for charge-offs, you can pay in full and even try to get a pay for delete in the process or you can settle the account for less than the balance due. The collection will stay on your credit report for seven years based on the original delinquency.

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Dispute Credit Report Errors

You have the right to dispute any information in your credit report that's inaccurate, incomplete, or you believe can't be verified. When you order your credit report, you'll receive instructions on how to dispute credit report information. Credit reports ordered online typically come with instructions for making disputes online, but you can also make disputes over the phone and through the mail.
The Best Method for Credit Repair Disputes

Disputing online is often faster and easier, but leaves you with no paper trail (you could take screenshots of your dispute). The same thing goes for making a dispute over the phone. Sending your disputes through regular mail has several advantages. First, you can also send proof that supports your dispute, for example a cancelled check showing you make your payment on time. You can also keep a copy of the dispute letter for your records. Finally, if you send your dispute via certified mail with return receipt requested - which you should - you have proof of the time you mailed. This is important because credit bureaus have 30-45 days to investigate and respond to your dispute.

Since you'll be sending multiple disputes, you can keep a credit report dispute template on your computer that you can modify for different disputes and different credit bureaus.
Sending Your Dispute

When you send your dispute, send also include a copy of your credit report with item you're disputing highlighted and a copy (not the original) of any proof you have that supports your dispute. If you don't send enough information about your dispute, the credit bureau can decide your dispute is frivolous and decline to investigate the dispute or update your credit report. But, if your dispute is legitimate, the credit bureau will conduct an investigation, which is often as simple as asking the creditor if the information is accurate, and come back to you with a response.
Credit Bureau Dispute Alternative

You can also send your disputes directly to the bank or business who listed the information on your credit report. They have the same legal obligation to investigate your dispute and remove inaccurate, incomplete, or unverifiable information from your credit report.
What Happens After a Dispute

If the dispute is successful and your credit report is updated, the bureau will make the change, alert the other credit bureaus, and send you an updated copy of your credit report. On the other hand, if the item isn't removed from your credit report, your report will be updated to show that you've disputed the information and you'll be given the opportunity to add a personal statement to your credit report. Personal statements don't affect your credit score, but give additional insight into your dispute when a business manually review your credit report.

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Review Your Credit Reports for Errors

Once you have your credit reports, read through them completely. If you have a long credit history, your credit reports might be several pages long. Try not to get overwhelmed by all the information you're reading. It's a lot to digest, especially if you're checking your credit report for the first time. Take your time and review your credit report over several days if you need to.
Reading Your Credit Report

Become familiar with the information contained in each of your credit reports. They'll all look very similar, even if you've ordered them from different bureaus. Each credit report contains: your personal identifying information, detailed history for each of your accounts, any items that have been listed in public record like a bankruptcy, and the inquiries that have been made to your credit report.
Deciding What Needs Repair

Here are the types of information you'll need to repair:

    Incorrect information, including accounts that aren’t yours, payments that have been incorrectly reported late, etc.
    Past due accounts that are late, charged off, or have been sent to collections.
    Maxed out accounts that are over the credit limit.

Use different color highlighters for each type of information to help you easily make a credit repair plan. You'll take a different approach for incorrect information than you would for a past due account so using different colors save time re-reading your credit report each time you're ready to payment a payment, call a creditor, or send a letter.

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Get the Latest Copies of Your Credit Reports

Before you can start repairing your credit, you have to know what you need to repair. Your credit report contains all the mistakes you've made that have led to bad credit. Read through your credit report to see what are the negative items affecting your credit score. By law, you’re entitled to free credit reports from each of the three credit bureaus each year. This yearly free credit report is available only through AnnualCreditReport.com. You can also order by phone or mail if you need to.
Other Ways to Get a Free Credit Report

You're also entitled to a free credit report if you've been turned down for credit because of something on your credit report, if you're currently receiving government assistance, if you're unemployed and planning to look for a job soon, or if you think you've been a victim of credit card fraud or identity theft. Some states even have laws that let you get an additional free credit report each year. All these free credit reports should be ordered directly through the credit bureaus.
Paying for Your Credit Report

If you've already used up your free credit reports for this year, you can order your credit reports directly from the credit bureaus for a fee. The bureaus all offer a three-in-one credit report that lists all three of your credit reports side-by-side. The three-in-one credit report costs more than a single credit report, but less than the combined price of purchasing your individual credit reports.

Why should you order all three credit reports? Some of your creditors and lenders might report only to one of the credit bureaus. And, since credit bureaus don’t typically share information, it’s possible to have different information on each of your reports. Ordering all three reports will give you a complete view of your credit history and let you repair your credit at all three bureaus instead of just one.

It's a good idea to make an extra copy of each report in case you need to dispute information. You can send the copy of your report to the credit bureau and keep a copy for yourself.

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