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A First Step Toward Credit Repair: Fix Credit Report Errors

By Barbara Marquand
Mortgage Credit Problems Columnist


The higher your credit score, the better your chance is of getting approved for a mortgage at a decent interest rate. Lenders offer the best rates to people with the best credit.

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But your credit score is only as accurate as your credit report. According to a study by the U.S. Public Interest Research Groups, most credit reports contain some type of error, and one in four credit reports contains a mistake significant enough to limit a person's access to credit. If your score is already low and you're looking for a bad credit mortgage, you need all the points you can possibly get. Sometimes doing no more than fixing errors on your credit report is enough to boost your score and get you approved with a bad credit lender. Here's how:

Five Credit Repair Steps

1. Get free copies of your credit report from each of the three major credit reporting bureaus through AnnualCreditReport.com. You're entitled to one free credit report from each of the reporting companies each year. Then review each of the reports and look for errors.

2. If you find a mistake, write a letter that includes your name, address, the item you're disputing, and why. Send the letter by certified mail with request for a receipt, along with any documents that can back up your claim, such as bill statements or canceled checks. You can find a sample letter on the Federal Trade Commission's Web site.

3. Write to the financial institution that reported the error and include the same information you sent to the credit bureau. The credit bureau by law is required to inform the other credit reporting companies, work with the reporting financial institution to investigate your claim within 30 days, and provide you with a free updated report if there was a mistake.

Loans for Bad Credit: Improve Approval Chances

4. Check the updated report from the credit bureau to make sure the mistake is fixed. You can ask that correction notices be sent to any companies, such as bad credit mortgage lenders, that requested your credit report in the last six months.

5. If the credit reporting company and financial institution say there was no error, ask that a statement of dispute over the matter be included in your credit report.

Once your credit report is fixed, you might find it easier to qualify for a loan. Get started by entering your information on this page to get free quotes from lenders.

Sources

http://answers.usa.gov/ / http://www.myfico.com / http://www.federalreserve.gov

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