How to Repair My Credit
Another Credit Repair Q&A
Q: I keep hearing about how credit repair is so “easy.” I decided I would take a swing at fixing my own credit report. After going through a major pain to actually GET the report online, I realize that there is so much information on these reports.
I have several accounts that I can’t even identify let alone figure out whether they are valid or not. I see letters and numbers and dates…numeric current status rating??? What is this stuff! Can anyone please help me make sense of this. I need to figure out what kind of debt I’m looking at here so I can make sure it’s accurate.
A: It is possible to repair your credit on your own. But one of the reasons so many people turn to credit repair companies for help is because credit repair can be downright complicated—especially when it comes to understanding credit reports.
If you just learn the basics, the rest will come with time. So start by carefully analyzing your report. It should contain every account you have with a section that lists your current balance. Whether the account is a mortgage, auto loan, credit card or some other kind of account—it will be listed there.
There are, typically, 3 kinds of debt:
1. Installment Debt—money owed to a creditor who expects payment over a fixed period of time made in agreed-upon monthly amounts. Installment loans commonly include auto and home loans. The Numeric Current Status Rating will use an “I” to indicate that your debt is an installment debt.
2. Revolving Debt—money owed to a creditor who bases your monthly payment on your current balance. Revolving debts commonly include credit cards, gas cards, and department store cards. The Numeric Current Status Rating will use an “R” to indicate that your debt is revolving debt.
3. Open Debt—Money owed to a creditor for an account with no pre-determined limit such as a cellular phone or other service. Each month your creditors expect you to pay your balance in full. The Numeric Current Status Rating will use an “O” to indicate that your debt is an open debt.
Understanding how debt is listed on your credit report is important if you plan on making any sense of it—it will enable you to determine who you owe, how much you owe, why you owe them, when you owe them and how you’re expected to pay. Being able to make these determinations is the first step to successfully making corrections to your credit report.
Take the first step
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