Credit repair is not always clear-cut. You may be surprised to hear that you can pay your bills right on time for years on end and still have crummy credit scores. Your score is not a report card on your payment habits, it is a complex algorithm designed to predict the chance that you will default on a loan. There are numerous factors involved, many of which may seem to have no bearing on your willingness or ability to repay.
You Have Control Over Your Scores
Credit repair is about achieving an optimal balance of the factors that influence your scores. There are many dynamics involved, including the type of debt you use, number of accounts you have, utilization of credit lines, and age of accounts. The FICO scoring model may be a black box, inasmuch as the exact formula is not public knowledge, but the mechanics are not obscure. Credit repair is a science and you can control your scores.
The Credit Bureaus Make Mistakes
Before enrolling in credit repair services, or making a DIY effort, it is important to know that the credit bureaus manage an unusually complex network of participants, all of which come together to create the credit reporting system. Creditors, collectors, and the service bureaus that catalog public records contribute the data. Massive software programs combine and sort it, and human operators supervise and guide the technology. Errors are commonplace and will not fix themselves.
Time Will Not Fix Your Credit
Errors will not fix themselves, nor will time. Credit repair is critical. Errors have a funny way of becoming entrenched and even multiplying as months and years go by. You cannot afford to imagine that a credit report left alone will shed reporting errors. Seven years will almost certainly leave you in even worse shape. You must look out for yourself and be as proactive as possible.
Deleting Errors is Only Half the Work
Everyone loves to see errors erased from their credit report, and it is indeed a wonderful thing. But error removal is not the only objective of credit repair. The ultimate goal is to have the kind of credit that will put a smile on the face of a lender. This involves more than a cleanup of your reports. You need to make sure you have the quality and quantity of accounts you need to get results.
Credit Repair Balloon
Your credit scores are calculated based on both the positive and the negative information on your reports. You can think of your scores as a hot air balloon. The negative accounts are the sandbags that keep the balloon from rising, and the positive accounts provide the hot air you need to ascend. You may cut off the sandbags, but without sufficient hot air your balloon will not go anywhere.
Building for Success
Many survivors of poor credit find themselves with no open accounts. The correct credit repair strategy for someone in this position is to simultaneously clean up the errors and rebuild positive credit. For most people attempting to rebuild, secured credit cards are the best alternative. They are inexpensive, and you will not be denied. Two cards will provide the lifting power you need. Just get them open, keep the balances down and watch your scores take off. Good luck!
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