How to Fix Credit & Negotiate With Creditors to Improve Your FICO Score

Your FICO score is what lenders and creditors look at when deciding whether or not to lend you money or extend additional credit. The higher your FICO score, the better your chances for getting additional credit. You can increase your FICO score by keeping track of your credit, fixing credit errors and negotiating with creditors to remove the error and improve your FICO score. Although the process is not difficult to do, it does take time, organization and patience.

Instructions

1

Get a copy of your credit report to find out what needs fixing. The first step to fixing your credit and negotiating with creditors is knowing exactly what's on your credit report. Go to AnnualCreditReport.com and request a free credit report from the three major credit reporting bureaus, Experian, Trans Union and Equifax.

2

Review your credit report for errors. According to a study done in 2004 by the National Association of State PIRGs, 79 percent of the respondents reported errors on their credit report. Some errors were serious enough to cause the creditor to deny credit. Negative errors on your credit report affect your FICO score. Therefore, you must review your credit report before contacting the creditors. Look for things like incorrect credit limits, erroneous late or missed payments, unwarranted charge offs or any other entry that hurts your FICO score.

3

Accumulate documentation to back up your findings. Once you find errors in your credit report, you'll need to have backup documentation as ammunition to prove to the creditor that the information is incorrect. Gather documents such as bank statements, money order receipts, loan satisfaction letters or any other documents that supports your position.

4

Contact the creditor to begin the negotiation process. The best way to contact them is either by mail or via their website. By starting the negotiation process in writing, you are better able to provide the necessary backup documentation. It gives a step-by-step paper trail that is hard to refute. If you're sending a letter to the creditor, be sure to include the account number, name, date of error and detailed information. If you elect to use their website, make sure to convert all of your backup documentats into an electronic format and save it as either a .PDF, .TXT or even a Word document.

5

Follow up with the credit company until the error is corrected. You must be diligent and keep following up until it is resolved. You won't see an improvement in your FICO score until the negative error is corrected.