1. Rebuild Your Credit
We can’t stress this first recommendation enough. Opening new accounts after a period of bad credit is the best thing you can do for your FICO scores. We recommend opening two credit cards. MasterCard and Visa are the best choice, and secured cards are 100% fine.
2. Become an Authorized User
Ask a friend or family member to add you to one of their credit cards as an authorized user. The account should be a few years old and have a perfect payment history and a low balance relative to its limit. When the account shows up on your credit you will inherit the account history as if it had always been yours.
3. Phase Out Store Cards
Store cards (as well as consumer loans offered by furniture and electronics stores) are of little value for your credit scores. They carry little positive value, and will harm you more than other account types if anything goes wrong. Pay off your store cards as your budget allows.
4. Open an Installment Account
If you have already opened new revolving accounts, consider opening an installment account to add breadth to your credit profile (and loft to your FICO scores!). Installment accounts involve a monthly obligation and are typically sizable, so check your budget first!
5. Manage Revolving Balances
If you want your FICO scores to behave you must manage your credit card balances right. It’s simple, if your balances go up your scores will go down. And if you reduce your balances your scores will rise. For FICO score optimization try to use under 20% of the available limit on each card.
6. Limit Credit Inquiries
Credit inquires lower your FICO scores. The impact of a single inquiry is small and will fade fairly quickly, but credit inquiries will continue to show for 24 months – and many lenders will deny a loan application for excessive inquiries, regardless of your score. Be sparing with your applications.
7. Confront Collections
If you have active collections you should have a strategy to deal with them. Under the FDCPA you have 30 days from the receipt of a collection letter to validate the debt. Confronting collections should also include statute of limitation research. Our credit repair services incorporate everything you need for safe and effective results.
8. Professional Report Proofreading
There may be many opportunities to clean up errors on your reports. Credit reporting errors come in all shades of subtlety. Most people will spot the obvious, but there may be other more subtle compliance issues that will deliver a significant FICO score boost. We suggest consulting an expert.
9. The Art of the Dispute
Getting results from credit bureau disputes is an art. It is not enough to send letters and hope for the best. Your campaign must be organized, your follow up must be timely and relevant, and you must stick with it. Need help? Our credit repair method includes the best dispute process in the business.
10. Save Money!
Open a savings account and make a regular, manageable, contribution. You know it is important to make your payments on time, but unexpected events have a way of popping up. A savings account will provide a buffer in the case of emergency – and a wonderful feeling of security that can make every day feel good!