Credit repair can be long and hard, but it doesn’t always have to be that way. If you’re looking at your credit report and realizing that you want to repair your credit by hand rather than trying to just file bankruptcy, then you really do have your work cut out for you. It can be tempting to just file bankruptcy, but there are some pitfalls to bankruptcy that have to be noted. This is something that’s not in your hands — once you file bankruptcy, there are going to be a lot of people in your business. You will need to look at what you really value in life. If you want to have this bankruptcy issue on your credit report for 10 years, then by all means — file bankruptcy. However, if you want to watch your credit score grow through targeted methods, then you definitely want to take this path instead of bankruptcy.
So, let’s get started. One thing that you will need to grasp before you can do anything else is the importance of sending out a verification letter before you start paying old debts.
Now, the more moral-minded reading this might wonder why you would even bother sending a verification letter if you know the debt is valid — because you entered into that contract willingly. However, there are some quick reasons:
1. Debt Moves — Your debt could be sold already to a collection agency or another company that is trying to collect on the money. If you send the money to the wrong place, your debt won’t be taken care of.
2. Possible Debt Settlement — If you send out a verification letter first, you might get their attention and see about a possible settlement offer.
3. Right Amount of Money — You need to make sure that you are actually paying the right amount of money that you actually owe. If this is an old debt, we can often overestimate how much we owe — why pay more than what you have to?
Sending out a verification letter is actually rather easy. You will need to make sure that you stick to the facts — you are trying to get things handled as quickly as possible. You will nee dot basically state that you are asking for validation that the debt is indeed yours, and that the collection agency in question is actually authorized to collect it. If your state requires the collection agency to be licensed in order to collect debts, then you will need to make sure that you state this as well.
It’s also important to note that this will take you some time. You can’t just snap your fingers and think that it’s going to make things work faster. You must give the collection agency enough time to respond. They can either not respond, where you will need to follow up with a letter to the credit bureaus saying that because the company did not validate the debt, it needs to be deleted from your credit report. However, if they do respond then you can begin your negotiations. You can do this on the phone, but it’s important to make sure that you follow up anything said on the phone with an actual letter. Phone calls do not hold up in court!
Overall, this is something that can take a lot of time before you reach a resolution. This is definitely not something to do if you’re impatient in any way. However, if you really take the steps in this guide to heart, you should have no problem getting things done in virtually no time at all!