Are you starting your credit repair effort? Congratulations! If you do it right you can completely transform your credit, boost your credit scores, and insure that you will meet future lender requirements. But the key to credit repair success is in the details. Here are some tips on getting started the right way.
Pay Your Bills on Time
From now on make sure that every bill is paid on time. A single new late payment will set back your credit repair effort. If it happens by mistake, don’t kick yourself; time will minimize the damage. But it is worth examining your finances to make sure that you can comfortably meet all of your current obligations. If you don’t have a budget you should consider creating one. It is well worth the effort and will help you protect your valuable credit repair progress.
Chip Away at Account Balances
Start reducing your revolving account balances. There is a very significant relationship between your credit scores and your credit cards balances. The FICO credit scoring model recognizes five different levels of card usage; 20, 40, 60, 80, and 100 percent. If you really want your credit scores to improve set a goal of reducing your balances under 20 percent of the cards limit.
Build New Credit for Credit Repair Success
If you don’t have any open credit cards open two secured cards as soon as possible. Secured cards require a small security deposit. The cards that we recommend for our credit repair customers require a minimum two-hundred dollar deposit. Your credit limit will be equal to the amount of your deposit. Once you have these new cards it is essential that you keep your balances low. If you hit the limit on one of these new cards your credit scores will fall as much as 150 points. If this happens, don’t panic! Just reduce your balance and your scores will pop right back up.
Use Your Credit Repair Rights
If you have any active collections you may receive collection letters. If you are in our credit repair program it is important that you send us these collection letters as soon as you get them. You have the right under the Fair Debt Collection Practices Act to ask the collector for proof that they have the legal right to collect, and an objective accounting of the amount they say you owe. If you send us the collection letter we will validate the debt. This is an important credit repair tool, but it must be used within 30 days of receiving the collection letter. And as always, if you need credit repair help, just give us a call!