Simple Steps for Quick Credit Repair

In this modern, credit-driven American economy, living with bad credit can be extremely distressing. This article offers simple steps towards quick credit repair, plus mistakes to avoid.

Now, “quick” means as fast as possible relative to your individual situation and personal effort. Some people can do it thirty days or less, others may need more time. But the good thing is to know that there’s hope.

Now here are the steps you can take to start restoring your credit and remove negative items:

(1) Start with the basics: Get your credit reports from all the major credit reporting bureaus. While you are at it, avoid free reports as this increases time for reinvestigation in case of a dispute from thirty days to forty five days. Obviously, you want to deny the bureaus the luxury of additional time.

(2) Still on the basics, get your credit score from either FICO (www.myfico.com) or Equifax (www.equifax.com). Why FICO? Because it is the score that most lenders use. Only Equifax credit bureau offers the true FICO score. Other bureaus offer their own proprietary scores, which may differ (sometimes by a large margin) from FICO.

(3) Check your report: Credit reports often do contain mistakes that would hamper your ability to get credit. Check accounts (known as trade lines) and types, names, addresses, dates, types of credit (secured or unsecured?), as well as possible duplicates.

(4) If you detect any inaccuracies, you have can either (I) write to the bureaus informing them of the discrepancies, or (II) report error to the furnisher. However, not all inaccurate information originates from a furnisher – in such a case, contact the bureau(s).

(5) Pay your bills on time and make up for missed payments. This alone counts for a large part of the scoring process. If you have to use one credit card to pay another, do it. Just keep them paid on time. One late payment could cost you up to 100 points!

(6) Reduce your utilization ratio. Your credit cards and other “revolving debt” should not exceed 30 per cent of your limit. This one aspect accounts for 30 per cent of your score, and can increase your credit score almost in an instant. You could distribute your balances among credit cards, request a raise in limit(s), or pay down high balance(s).

(7) Negotiating with your creditors and/or debt collectors is one of the best, if not the best way to get negative items removed from your file. More recent adverse information is the most damaging, so begin with that. Negotiations should include removal of negative items as part of the deal, as well as reduction of fees.

(8) Disputing accurate negative information with credit bureaus is one of the tactics used by credit repair clinics. This may or may not work. Or it may also work, but not in the long term as information could get verified and re-entered into your file. The presumption here is that some creditors will find it not worth verifying information that is too old, especially if the amounts are on the lower side. Just hope that the dispute(s) goes past the bureaus in the first place.

(9) If you decide to go the credit bureau dispute way, take care not to use canned letters lifted off the internet. Your letter(s) will look just like thousands of others; a straight give-away that you’re using credit repair techniques. Also, avoid buzz words such as “line of credit”. You want to sound like an ordinary person disputing an entry.

(10) Don’t close open accounts, especially if they are in good standing. It is okay to keep open accounts, even if they show some late payments. Reason? Those accounts are helping you build history. Just do what you can to keep them paid on time.