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I work in Iraq and have little time or access to attempt to repair my credit score. There are multiple collections on my report that belong to my ex-wife and were obtained following our divorce. Someone recommended that I use (a credit repair) firm to remove the mistakes. In my situation would that be a safe or effective option for repairing my credit score? Sincerely, Lost in Iraq
— Russ D., Camp Slayer, Iraq (Fort Worth, Texas)
More Americans seem to be having trouble with exploding mortgages and high-interest credit card debt these days. That’s brought a lot of strange creatures out of the woodwork —including a variety of “credit repair” specialists who offer, for a fee of course, to work wonders on your credit report and raise your credit score.
What these folks don’t explain very well is that there’s nothing they can do (except maybe help you put stamps on a few envelopes) that you can’t do yourself. Here’s what you can do yourself for free.
Get a copy of your credit report from the three credit rating agencies, Equifax, Experian and Trans Union. In the old days, you had to write to each firm and request a copy. Today, you can go to www.AnnualCreditReport.com and request a free copy from each agency, once a year.
This site, set up as required by federal law, is the only site that’s truly free, so don’t waste your time with imitators. You can also order a copy of your credit score, but there’s a small fee for that report. Don't waste money on "credit repair" kits or "monitoring services" that charge monthly fees: It's cheaper to just order up your score when you need it.
Once you get a copy of your reports, look them over carefully. Make note of any information that isn’t accurate. If you have a general comment or explanation, add a short (100 words or so) statement explaining your situation. Each credit agency handles disputes and corrections a little differently, but generally you can do this by mail, phone or online. It can take 30 to 45 days to get a response.
Keep in mind you can only change incorrect or outdated reports; no one can get an accurate piece of negative information removed. (Not legally, anyway.) If you’ve got a few bad marks, there are steps you can take to reduce the impact: Pay off old accounts, etc.
Be careful about closing accounts with unused credit lines, though; this can hurt your credit because your existing debts will now make up a bigger portion of your total available credit, which can reduce your score. For more on how your FICO score is calculated, check out this PDF download from Fair Issac & Co., the folks who came up with credit scores in the first place.
If you’ve corrected everything but still have bad marks on your report (your car was repossessed, you went through a bankruptcy), you may have to just wait it out. Generally these fall off after seven years. (If you decide to pay off an old debt, keep in mind the clock on those seven years may start up again when you start repayment.)
If you need help sorting through the process, you should contact the National Foundation for Credit Counselors, who can refer you to someone who can help over the phone. (Check here for locations in Fort Worth or elsewhere.)
The Federal Trade Commission, which fields complaints about credit repair scams, has more information on its Web site to get your started.
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