The First Steps of Credit Repair
There are plenty of people that live from paycheck to paycheck and with the rising cost of gasoline and the necessities of life, it can be difficult for us to make those paychecks stretch far enough at times. This has led many of us to be in uncomfortable living situations and it has even hurt our ability to be able to pay our bills on a regular basis. If you find yourself in this situation and are looking at some low credit score numbers, here is a little bit of credit repair advice that may be able to help you to raise your score rather quickly.
The first thing that you need to understand is that credit scores come from three different sources and these numbers can vary to a large extent. Many banks are going to use one company or another in order to determine your credit score but for the most part, they are going to take a look at all three and use the middle score as your overall score. This can help you in some cases but at times, it may also hurt you in your ability to receive a loan.
Credit repair really starts with a little bit of effort on your part. The first thing that you need to do if you’re trying to repair your credit is to pay all of your bills on time. What many people are not aware of is the fact that paying one bill late is going to affect your credit score in a very large way. That is why it is important for you to make sure that all of your bills are paid on time, every month. If you are unable to do this in your present circumstances, you may need to find a way in order to change your circumstances.
It is also important for you to take a look at your credit report and see everything that is on it. If you have a lot of open lines of credit with department stores or perhaps other credit cards, this can lower your credit score as well. Any of the smaller credit cards that you are not currently using should be cut up and canceled with the company. If you have any small credit cards that you are paying on a regular basis, always make sure that you are paying more than the minimum due and that you keep the balance at under 50% of your credit limit.
Finally, it may be necessary for you to look to a credit repair agency in order to help you over some of the rough spots. Make sure that you’re going with a credit repair service that is legitimate and that is backed with government funding. There are a lot of different fly-by-night credit repair services that are out there which are not really interested in helping you with your problem but are more interested in lining their pockets with money that you don’t really have.
Faranak Groves
http://www.articlesbase.com/finance-articles/the-first-steps-of-credit-repair-528869.html
Filed under: Credit Repair Advice
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whats the first steps to repair my credit i need to see results within six months?
I work for a finance company and view credit reports all day, so here’s my opinion.
If you have CCJ’s or defaults, there will be nothing you can do to ‘repair’ your credit in 6 months. The companies that promise to repair your credit are telling lies. If a negative mark on your credit file is true and correct, it can’t be removed for 6 years.
Now, if you have just a few missed payments here and there and a few arrears, bring them up to date as soon as possible and keep the payments up to date.
But I stress, if you have a CCJ or default in the last year, there won’t be anything you can do to instantly repair your credit. You need to satisfy the CCJ & default firstly though, and then make sure everything else is paid on time to make sure your credit in future is good.
References :
Depending on what you have you should start one item at a time pay that off move to the next. Also if you have close family who has good credit you may check about having them add you as an authorized user on an account, this often helps improve your score dramatically.
References :
SR. Credit Anylist with Citi Financial.
go to creditboards.com it is an online free forum that will explain exactly what steps you need to take. I can summerize for you what you need to do:
1. get you credit report from all three bureaus.
2. Dispute the items that you want removed from you credit, you can do it online at the Credit Bureaus website. (only dispute two or three at a time or they will think it is frivolous and it will not do you any good. (they have 30 days to verify or they have to remove neg items from you credit report.)
3. You can also send a Debt Verification letter to any Collection Agencies on you credit( credit boards will have sample letters you can use for dispute, always send certified mail.)
4. If the Credit Bureaus send back and they say they have verified the debt, send them a letter asking how they verified the debt. This info is also available at CB. (Certified Mail)
5. Make sure you lower the utiliztazion of your credit cards to below 30%, that is if you have credit cards. Also when lowering you limit to below 30% do so over the six month period with equal payments, if possible. This will also raise you score. If you pay them all off in one payment it can lower your score.
6 If you do not have any credit cards go to http://creditcardwarehouseonline.com and apply for a card. They have cards for people with all kinds of credit. They also have a good article about how to raise you credit score. You can also visit http://creditcardwarehouse.ecreditdirectory.com/ for credit cards too.
7. If possible go to your bank and take at a loan for $500 using a bank cd as collateral. Make sure they are going to report this to the credit agencies. (you will have to put 500 in a cd to secure the loan if you have poor credit.
8. Do not apply for anymore loans or credit cards except for the 2 above (and only do that if needed) because multiple inquiries will also lower your score.
Again these are the steps I have used and are just a summary of what you should do. I really advise you to visit Creiditboard (this is not my site, it is however very useful for anyone who is trying to rebuild their credit). Good luck. Rebuliding credit does take time but you could easily raise your score 30 or more points in six months time.
References :
The way to build good credit is still to pay your bills on time and also to keep a low balance on your credit cards. For best results keep the amount you charge on your credit cards under 30% of the credit limit.
That said there are other things you can do to improve your score however it will largely depend on what you credit situation is at the time. The best strategies to employ when improving the credit score for someone with a credit score of 540 will be different from someone who has say a 620 or 660 score.
It is easy and the best part is you can do it all yourself. Check out this link for more details.
http://my-financial-steps.com/index.html
Good Luck
References :
http://my-financial-steps.com/index.html
From the answers I’ve seen, they haven’t really answered the question, so here’s my 2 cents:
This is what makes up your score:
1. Payment history- 35%
2. Total debt owed to available credit ratio-30%
3. Length of time establishing credit-15%
4. Types of credit established-10%
5. Inquiries and New accounts-10%
As you can see, #1 and #2, are the 2 most important factors to your score, since it counts for almost ⅔ of your score. Aside from paying on time, the only thing that has a dynamic impact on your score is how much credit is used compared to how much is available to use. You should keep the balances on all your credit cards at or even below 30% of their limits. For example, if you have 3 credit cards with a combined limit of $3000, the balance should be no more than $900 between the 3 cards, or $300 on each card.
Another thing you should know is that your score’s affected by activity in the past 2 years. It’s important to start making consistent payments. Also, if you have collections, try to negotiate either having them change it to a better rating on your credit, or even better a "pay to delete", which is a payment in exchange for removing it from the report. Just simply paying collections doesn’t help you, because the collection account even after it’s paid still has done damage to your score. You have to get it deleted to make a real difference. Here’s some links that explain it in detail:
http://www.creditinfocenter.com/debt/settle_debts.shtml
http://www.creditinfocenter.com/debt/neg_rating_after_settle.shtml
http://www.creditinfocenter.com/debt/CanCreditorSue4SettlementDifferences.shtml
http://www.creditinfocenter.com/debt/ActualDebtSuccesses.shtml
http://www.creditinfocenter.com/debt/debt-negotiation.php
References :
credit analyst/underwriter
Link(s) to debt negotiation:
http://www.creditinfocenter.com/debt/settle_debts.shtml
http://www.creditinfocenter.com/debt/neg_rating_after_settle.shtml
http://www.creditinfocenter.com/debt/CanCreditorSue4SettlementDifferences.shtml
http://www.creditinfocenter.com/debt/ActualDebtSuccesses.shtml
http://www.creditinfocenter.com/debt/debt-negotiation.php