Step #1 Identify your Credit Problems

Obtain your Credit Report

You can get a free credit report from a website like freecreditreport.com and others like it. You are entitled to one free credit report a year. Take advantage of this and use this as a starting point to gaining your financial freedom back. Also, contacting the three main reporting agencies can help as well:

• Equifax 
• Trans Union
• Experian

Once you have your credit report and you know who is reporting on it, the next step is pretty easy.

Find and circle the negative statements or problem areas in your credit file. Although the information on these credit reports is generally coded like your bank statement, the Fair Credit Reporting Act (FCRA) requires the credit bureaus to explain everything and anything on the report that you cannot readily understand

Historical Status

This is a record of your monthly payments.  In the ideal credit report, this should be free of “past due” symbols – which may be 30, 60 or 90 day periods.  Approximately 90% of the bad marks could be due to “past due” symbols.  Many of these could be entered accidentally or because the postal service was slow in delivering the mail and your payment was late, or perhaps there were delays in processing your payment.  OF course, you could have actually made late payments.

Remember, you must have your payments credited to your accounts before the due date, not just mailed by that time, if you are to avoid late payment marks.

Comments Section

This section may contain such remarks as “Charged to P & L” (means profit and loss).  When a firm charges an account to profit and loss, it has been charged off as a bad debt loss; it does not expect to be able to collect.  This implies that you are a bad credit risk.

Inquiries

Inquiries made by any banks, stores, or other companies to whom you applied for credit will be listed in the report.  “Too many” of these may be taken by a potential creditor as an indication that you are in dire financial straits and may be seeking credit as a solution to your problems.  Creditors will often refuse to give credit just on the basis of ‘too many inquiries.  How many is “too many”?  This is usually a subjective judgment by the individual creditor.  However, as few as 4 or 5 in six months may be “too many” for some creditors. 

I just provided a short glimpse of some steps and useful tips when identifying your credit problems. Please take a moment and leave feedback on your thoughts and other useful tips others can follow.

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My Credit Repair University - This is a great guide that will bring good results when repairing your credit!