Credit repair requires courage. If you see something on your credit report that does not look familiar to you, you have the right to dispute it with the credit bureau. To hold back would be a great mistake. Do not attribute the credit bureaus with infallibility. The truth is far different. Errors abound.
And Dispute Again
Errors, generally, are not the fault of the credit bureaus, but the inevitable outcome of a complex reporting system involving countless reporting entities. Credit repair is the cure. And if your disputes encounter resistance, do not give up so easily. Dispute again. Demand satisfaction. You have the right to ask for errors to be investigated and corrected.
Getting a collection letter in the mail is no fun, but it does offer a fantastic credit repair opportunity. The Fair Debt Collection Practices Act requires collectors to provide documentation of their legal ownership of the subject debt as well as proof of the amount that they say you owe. This is called debt validation.
Do It Soon
Your debt validation credit repair opportunity only exists for the thirty days following your receipt of the collection letter, so you must act quickly. If the collector cannot provide the required documentation they must stop collecting and reporting. But an important caveat applies! If you have no doubts about the accuracy of the collection there is no point in validating the debt unless you are ready to negotiate payment.
Open New Accounts Now
This is a major credit repair opportunity which can provide a dramatic boost to your credit scores. If you have been through a difficult financial period, and your credit suffered as a result you can get enormous benefit from opening a couple of new credit card accounts now. As critical as this is for those who currently have no open accounts, it is equally valid for those who do have accounts which have survived the period of difficulty.
Get Secured Cards
The FICO credit scoring model needs open and active accounts to calculate a score, so if you do not have any open accounts it is essential that you open them now. But FICO also gives credit to those who have taken steps to rebuild after a period of hard times, so even if you still have open accounts you can benefit from opening one or two more. Concerned about being approved? Just get secured cards. They are easy and you will not get denied.
Keep Revolving Balances Down
Once you start rebuilding your credit there is one more credit repair tip that will insure that you get the best possible results from your hard work. Keep your balances down! The FICO scoring model puts enormous weight on the ratio of your revolving balances and your account limits. If you open a new account and then use the entire available balance do not be surprised to see your scores fall.
Avoid This Trap
There is a common credit repair trap that you want to be sure to avoid. Many people get small cards, use the full amount available each month, and then pay the balance when the bill arrives. It is unlikely that your payment date and the reporting cycle of the card issuer will coincide. It is more likely that your account will be reported with a higher interim balance, which is likely to harm your scores. For credit repair, and when you need your scores to be their best, limit your card usage to a small percentage of the card limit and do not exceed that number.