Maybe easier said than done, but this is a big credit repair factor. The FICO model puts so much weight on your revolving balances that you really want to take advantage. Chip away until you are using less than 20 percent of each cards limit and your scores will go up, up, up.
Pay Off and Close Store Cards
Store cards are of little use to your scores. When you are good they are practically useless, and when you are bad, they will kill you. Pay them off and close them. Goodbye. That said, if opening a store card will save you a ton of money on a purchase, go right ahead. Just get rid of them when you are able.
Make Your Payments on Time From Now On
It is a big deal. If you cannot keep up with your payments, it is not time for credit repair. You need to stabilize your finances before getting on the path to recovery. Once on your way, make sure to make your payments on time. A single late payment will create a disappointing drop in your scores.
Create a Budget
Facilitate your credit repair success with a budget. This does not have to be an austerity plan. Just make sure you know how much you are really spending each month. Many credit wrecking decisions are made simply because of a lack of good information. From now on, before you commit to a new monthly obligation, make sure you can afford it.
Become an Authorized User
This is a very cool trick. If you have a friend or family member with awesome credit, who also has a credit card with a few years history and a nice low balance, give them a call. If they are willing to call their credit card company and add you as an authorized user you will inherit the score benefit of the card. Just like magic.
Proof Read Your Credit Reports
Mistakes happen. And when it comes to your credit reports, mistakes can cost you big time. Get your reports, all three of them. Or better yet, get a good user-friendly tri-merged report and proof read the heck out of it. Scour it for errors. Now is the time to get compulsive. Make a list and get ready for some credit repair.
Dispute Everything That Looks Fishy
If you found mistakes on your credit report, and I bet you did, dispute them. You just need to send letters to the bureau on which you found the errors. Keep your letters short and simple. And set up some organizational system. Credit repair requires a little patience. You may have to re-dispute if you do not get happy results the first time.
Validate Debts
If you get a collection letter you have two choices. You can ignore it if you know it is right and you are not financially ready to confront the collector. But if it looks wrong, validate the debt. This is a right granted by the Fair Debt Collection Practices Act. Send a letter asking for proof of their right to collect and an accounting of the amount claimed. If they cannot validate, they must go away.
Stay the Course
Keep it up. Credit repair will not take forever, but a little patience will be rewarded. You will be amazed at what you can do with your credit report and your scores within just six months. Watch your budget, make your payments on time, manage your debt, and keep disputing the mistakes on your reports. The goal is near.
Join a Credit Repair Service
A little bit of help is a wonderful thing. For a small monthly fee, you can hire a good credit repair company to manage it all for you. You will still have to pay your bills on time, but they will take over the credit report clean up, write and send your dispute letters and give you all of the handy pointers you need to succeed. Good luck!