Credit Repair: What not to Do!
finance
Beware of Store Cards
Department stores love to push their credit cards by offering a discount on your purchase if you sign up on the spot. This can be a good deal. But it is handy to know that store cards create triple trouble on your credit report. First, your score will be reduced because of the inquiry. Second, your score will be reduced because of the new account that will soon appear on your report. And third, store cards tend to give a low credit line, often just above your purchase amount. This can be terribly damaging as the FICO credit scoring model puts a lot of weight on the relationship between your balance and your high credit limit.
Watch That High Limit
I run a national credit repair company and speak to people all day long about their credit reports. One of the bits of advice that we like to offer our customers is to pretend they only have half the limit on their credit card that they really have. It takes some discipline to do this but it can make a big difference on your credit score. As soon as your balance exceeds fifty percent of your available limit your credit score will start to suffer. If your credit balances are currently close to your credit limits you might consider calling the credit card companies and asking them to increase your limit. You will be amazed at how fast this can make your score go up!
The Auto Shopping Credit Trap
I can’t tell you the number of times that we have looked at a credit report and seen multiple auto credit inquiries. When we ask our customer they inform us that they only went to two different dealers. Auto dealers will often shop for the best interest rate for you. If they shop with three auto finance companies you will have three credit inquiries. These multiple inquiries can have a significant impact on your score. This is not the auto dealers fault. After all, they are acting your best interest, but it is best to be aware of the possibilities. If you are shopping for a car I would suggest not providing your Social Security number until you are settled on the car you want.
No More Mr. (or Mrs.) Nice Guy
Just about every day in the credit repair business we come across someone that was nice enough to co-sign for someone on a car loan. I’m sorry to say this, but chances are that if they need you to co-sign they will not make their payments on time. And this will kill your credit scores. I know that this is a tough call. It is hard to say “no”. If this situation arises in your life I suggest an alternative approach. Go ahead and co-sign. But when the payment book arrives ask them to give it to you. Have them pay you instead of the auto finance company. You will make the payments on time. And maybe they will feel some extra obligation to make their payments to you on time as opposed to some anonymous auto finance company.
Don’t get complacent
Check your credit from time to time. In December of 2003 Congress passed the Fair and Accurate Credit Transactions Act (FACT Act) which, among other things gives you the right to get a free credit report from each bureau one time per year. This law was passed to protect you from the credit reporting errors that occur far too frequently. Don’t imagine that because you are doing everything right that the credit bureaus are reporting everything correctly. Get your reports and proof read them carefully. It’s your right.
No explanations needed
Are there errors on your report? Whatever you do please don’t write an explanation for the credit bureaus to include on your credit report. No creditor wants to see your story. Sorry! But it’s true. If there is something wrong on your credit report you should dispute it! If you don’t feel up to the challenge of dealing with the credit bureaus hire a reputable credit repair company. They have the experience and knowledge to get the job done for you. A good credit repair company should be affordable and efficient. You should never have to commit for a predetermined period of time. Before you hire someone pick up the phone and talk to them. Make sure you are comfortable. It’s your money
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
Jim Kemish
http://www.articlesbase.com/credit-articles/credit-repair-what-not-to-do-110596.html
finance
Filed under: Credit Repair Advice
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Credit repair?
I want to repair my credit I know this will take some time however, I have come into some money and want to pay everything offf thats on my credit if I do so what will happen?
will be removed?
will my score get higher?
I’m so clueless as to what will happen after I pay them all off and its kind of embrassing Im only in debt by 3000.00 how sad
So you’ve come into a bunch of money…time to repair your credit.
First thing I would do is get a copy of your credit reports and find out what you need to settle. Secondly, don’t deal with the collection agencies unless the original creditor absolutely won’t talk to you.
I would recommend paying off your open credit cards first. Then tuck them away and don’t use them. This will take care of the "%available credit" part of your credit score"
The next part is cleaning up your delinquint accounts. Call your creditors and see if they will settle for 50% or less of your delinquent balance.
Demand that you get a copy of the settlement in writing BEFORE you send them a check. Make sure that any settlement agreement you reach includes what they will do with your credit report…you can see if they will take it off of your report, but if they won’t at least demand that they put the phrase "pays as agrees" or "paid in full" on there. The ideal is that they remove the item from your report entirely.
If the creditor sent an item to collections, call the collection agency and demand that they remove the collections item from your report. (This will improve your score).
Start with the lowest delinquent balance first and work your way up…the more line items you can remove from your credit file the better.
Good luck!
References :
When paying off your creditors make sure you get a release form from each one, showing that you satisfied that debt. Because sometimes it’s never taken of your credit report after paying them back. As far as your credit being repaired to the point of getting credit again, it’s going to take some years before you can.
References :
Get a copy of your credit report. If there are any errors, dispute them with the credit bureaus.
Start negotiating settlements of your derogatory items. Start with the newest and work back to the oldest. The older the item, the less impact on your score. Anything close to the 7 year reporting period, just let age off.
If you have single entry derogatory items like cell phone, medical, and utility bills, ask for a delete for pay. That will remove the item and work best for your score. In the case of multiple entry items like credit cards, the collection company can only remove what they posted. The charge off by the original creditor will stay on your report.
If the debt is more than 3 years old, offer 25%; 2 to 3 years old, offer 50%; less than 2, offer 75%. Lump sum gets the best deals. Payment plans have to be short term.
Get any settlement agreement in writing and keep it, along with your payment proof, forever. Do not give collectors direct access to your bank account.
Paying off old debt will not improve your score unless you get it deleted. In fact, paying old debt will initially lower your score. When you pay an old debt, it becomes a "current" transaction and is counted more, including the negative parts. Creditors look at your whole credit report, not just the score. Paid old debt always looks better than unpaid.
You will need at least 24 months of consistent, on time payment history to improve your score.
References :
baby please that is not said. at least you are in debt only 3000.00 dollars. please do not be embarrassed. some are in debt in the 50,000. thats a house! anyway yes your score will get higher but the debts will stay on you credit reports for a good period of time. also when you pay it off please keep the reciepts. this will help you when you apply for a loan and they pull your credit reports and see you have those debts on there. you can politely show them the reciepts and they will 4give your debt. also when you pay it off get the address to all the credit reports and mail a copy of your reciepts to them so they have proof you paid the bills off and take it off for you. because the bills you pay off suppose let the credit report people know you paid the debt. but sometimes they do not. that will prevent your score from coming up.
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I’ve been through this myself.
about.com has some of the clearest explanations of how it works. Check out the links in the lower half of the window
http://search.about.com/fullsearch.htm?TopNode=%2F&terms=credit+repair
References :
This article on improving your credit will help you, the article lists several tips on improving your credit, the article lists several tips on getting your credit score up.
References :
Hi,
I used "Credit Solution" to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It’s legitimate. I came across this company on NBC News Special Edition.Check it out here:
http://redirx.com/?0g4c
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