Wednesday, March 19, 2014

The Semi-Plan


     I actually started out with this new endeavor about a year ago. The year 2013 had just arrived and I was at my computer looking at my budget in Quicken. I was reflecting on the year that had passed and trying to find a way not to repeat the struggles that my family had encountered. I knew we had the tools to succeed, but why weren't we? So, I started formulating a semi-plan...... so to speak. I say semi-plan because I really had no idea where to start. I believe that this is the main reason that a lot of people are so apprehensive about tackling there credit problems. So I just winged it at first, hoping that taking that first step would enlighten me to a better path than what I was currently on.

     The first thing I was thinking was to fix my credit so I could possibly get better rates on the things that I was financing and lower my monthly payments. So I went to www.annualcreditreport.com and got a copy of all three of my credit reports for free. As I was looking over these reports the only two things that came to my mind was these things look horrendous and what am I supposed to do to fix them. While I had ordered and reviewed my credit reports in the past, I never actually did anything about the negative or incorrect items on them. I had no clue as to where to start.

     I then started wondering, what does all this information translate in to as far as my credit score? So I signed up for credit monitoring from the three big credit bureaus. I case you don't know they are Equifax, Experian, and Trans Union.  Yes, I paid for their service. I still do. I figured that I was investing in to my financial security by becoming as knowledgeable as I could about how all this credit stuff worked.

     I was shocked at what I saw. I had lived without credit for so long after my separation with my ex-wife that I thought that the stuff that we went through when we separated five years ago would surely be gone. To say the least, it wasn't. I almost gave up there. Below are the scores that I had to start with.

Date Equifax Experian TransUnion Average
1/13/2013 435 529 500 488
For your reference, Trans Union now uses a different scoring system (Vantage) than the other two bureaus so my score on that website actually looked a lot higher. I signed up with www.creditkarma.com to get a more accurate score using a similar model as the other two credit bureaus.

     I didn't understand how much the separation had hurt my credit. Only recently before we split up I was getting approved for student loans, car loans, I had a couple of credit cards, and I had even bought a house a few years prior to that. How could my credit score get so low? What was I going to do to start recovering from this? I was mad at my ex for all she did not pay. I was frustrated with the fact that I even had to deal with this problem at all. I used to pride myself with having very good credit. Even if I didn't know what my actual score was, I knew that I could go just about anywhere and get approved for what I wanted. I had to figure out something to fix this now.

     I started reading everything I could get my hands on about credit repair. I needed to know what I could do to fix this ASAP. The best two books that helped get me started were, "Credit Warefare: Retake Control of Your Financial Life", by S. Louis Blisko and, "Best Credit: How To Win the Credit Game", by Dana Neal. They really helped me gain a really good understanding of the credit world.

     I started the dispute process after reading these books. Some of the stuff I read suggested only disputing a few things at a time. I ignored that and went for the gusto. I disputed everything that I could find on the reports. After all, there were a lot of things on my reports that just were not accurate and I felt that everything needed to come off. I sent everything certified mail so I had a record of the big three receiving the letters. After a couple of back and forth letters between them and me, my credit score jumped up dramatically, but not nearly where I wanted them to be. They are shown below:

Date Equifax Experian TransUnion Average





4/2/2013 528 572 610 570

I knew that, after this initial round of battles with the credit bureaus, that I was definately in for a war. While I saw a lot of things drop off, A few things stayed and I had actually hurt my credit some by taking some of the aged accounts off. This was going to be a long, drawn out war where I was going to have to pick my battles to fight in order to get to where I wanted to be.