My name is Rick Baron, and I've developed this site for informational purposes only. If you've made it to this site, it's because you have a genuine interest in either cleaning up your credit history or establishing new, good credit.
The first step in cleaning up your credit is to get a copy of your credit report. There are three major credit reporting agencies, and they keep files on everyone in the U.S. with any credit. The agencies are Experian (EXP), Equifax (EFX), and Trans Union (TUC). You can log on to each bureau's site using the links below to obtain your report directly from each of them, which I recommend. If you don't already have a copy of your report with information from all three credit bureaus, you can get a free one once a year directly from the bureaus by clicking the free credit report link below or you can call or e-mail me and I will help you get a copy. Each account listed on the report should have contact information for all of your creditors. The credit bureau names and addresses are typically listed near the end of the report.
Once you have your report, take the time to read it thoroughly and familiarize yourself with every detail on each account. On each of your accounts you will see the name of the creditor, the account number, which credit bureaus are reporting the information, when the account was opened, what the original balance was, the current payment, the current balance, the method of payment (installment, revolving, mortgage, etc.), the status, and your payment history.
When cleaning up your credit it's important that you remember you will be taking a three step approach. In the first step you will be dealing directly with the credit bureaus to correct or dispute any incorrect information they are reporting. The second and more difficult step is dealing directly with the creditors to whom you owe money. The third step will be to recontact the credit bureaus to make sure they correct or accurately report any changes you've been able to make with your creditors.
Once you have familiarized yourself with your report, make note of any information that is innaccurate or incorrect. For example, if an account shows up that you know is not yours, or an account you have long ago paid in full still shows a balance, write down the account name and number and note which bureaus are reporting the information. You are now ready for step 1, which is to write to the credit bureaus to request they correct or verify the information you feel is innaccurate.
When writing to the credit agencies (EXP, EFX, & TUC), make sure you give them complete and accurate information. Give them your full name, current address, social security number, and age first. Then list complete account information on the accounts you are asking them to correct (name, account number, etc.). Explain that to report this innaccurate information is "highly injurious to my credit rating" and to please correct it within the next 30 days. Try to keep it short and simple, and don't request that they investigate more than two or three accounts at a time. Also, make sure you only write to the agencies that are reporting the information. Don't overwhelm them with requests to verify twenty or thirty accounts at once, or they might put you at the bottom of the stack. By federal law, they have thirty days to verify and/or correct the information. If they cannot prove the debt is yours, they have to delete the account entirely as though it never existed.
Now you are ready for step 2. As I said before, this is the most difficult part because you will be dealing directly with the creditors with whom you still have outstanding debts. Step 2 is only effective if you have managed to save up enough money (at least half of what you owe per account)to be able to negotiate some kind of settlement with the creditor.
There are probably two different kinds of creditors you will be dealing with: 1) the original company you had the debt with, and 2) collection agencies who have purchased the right to collect your debt from the original company. There are a few rules of thumb to go by when dealing with them to make it easier on you. First, if you are calling them from home, press *67 to disable caller ID. This will prevent them from calling you back and harrassing you later. Also, particularly when dealing with collection agencies, know ahead of time that their job is to treat you as horribly as possible to shame you into paying them all of the money they think you owe. Remember two things when dealing with them: 1) You deserve to be treated with respect and they don't have the right to treat you disrespectfully, and 2) This is YOUR money we're dealing with here, not theirs. If they get rude with you, hang up on them. Realize most of them are on commission, and if they don't get any money from you, they don't get paid. Let them sit for a day or two and then call them back. By then they should be more reasonable.
When dealing with these people your highest goal is to settle the account for less than you owe AND get them to agree to delete the account from your credit record. Getting them to delete the account is pretty difficult, but it can be done. If you can't get them to delete it, then you want to at least get the account settled and show a zero balance. Most creditors will settle an account for less than the full amount, but rarely for less than half. In any case, be absolutely sure you get whatever agreement you reach with them IN WRITING, BEFORE you send them any money. If you don't, they are not bound to the agreement and could easily deny you had any kind of deal.