How to Repair an Equifax Credit Report

Credit is a huge part of every American citizen's life. It affects rates on mortgages, personal loans, credit cards and car loans. It can prevent you from seeking certain types of employment (especially in the finance business). It can even prevent you from renting an apartment. If you have poor credit on an Equifax credit report, you likely have poor credit at the other credit bureaus also. Fixing your credit is a challenge.

Instructions

1

Review your Equifax credit report. Make sure you have an updated copy. Visit Annual Credit Report in the Resource section to get a free copy. Make sure you select "Equifax" when prompted to select a credit bureau. Also, you should pay for a copy of your three-digit FICO score. This will give you a snapshot of your overall credit. Scores above 720 are excellent; scores below 600 are poor.

2

Look for the most negative aspects on your credit report. These include judgments, liens (both tax and consumer), collection accounts, charge-offs, over-limit accounts and seriously delinquent accounts (that have not yet been charged off). These must be a priority.

3

Look candidly at your finances. If you cannot meet your monthly payment requirements right now, you need to take immediate, preventative action. Call the creditors for all delinquent and about-to-be delinquent accounts. Ask for a hardship plan. These are normally short-term plans that drastically reduce interest rates, fees and payments. These are proprietary programs, though, so qualifications can differ dramatically.

4

Fax income documents (W-2s and pay stubs) to your lenders if required. Most lenders need to verify your income before putting you on a hardship plan.

5

Craft a new budget. You need to start cutting spending whether or not you are approved for a hardship. Look at three months of bank statements and add together all non-essential expenses (eating out, clothing, entertainment). Eliminate these from your new budget. Calculate how much you can pay toward debt by subtracting only essential expenses from your net monthly income.

6

Use the new budget to attack the worst credit first. Federal tax liens are first--the IRS can levy your bank accounts and/or garnish your wages if these remain unpaid.

7

Pay collection accounts and judgments. Last, bring over-limit accounts under their credit limits. Pay minimums on all other accounts while you're working to get these negative accounts under control.

8

Pay as much as you can each month against the highest-interest account. Pay minimums on the rest. Continue this process and you'll find that not only is your debt shrinking considerably, but your score is improving each month.