Archives for "Credit Repair"
Ten Steps to Credit Repair Success
You Can Do It!
Credit repair works. Great credit can be yours, along with the wonderful benefits it offers. It just takes a little planning. Take the first step today and experience the joy that comes from regaining control over your financial life. Here are our favorite ten steps to credit repair success!
1. Proofread Your Credit Reports
Credit repair is necessary for millions of Americans. The credit reporting system involves the credit bureaus, creditors, collectors, court houses, and all the software that ties the system together. Errors happen. Credit repair is the cure. You cannot assume that mistakes will correct themselves. Proofread your reports and identify every questionable entry.
2. Dispute, Dispute, Dispute
The Fair Credit Reporting Act requires the credit bureaus to process consumer disputes about credit report accuracy. Put your legal rights to work and dispute every questionable item you find. If you encounter resistance, if the credit bureaus do not respond favorably to your credit repair effort, do not give up. Write back and demand that they have the creditor research the issue properly. Patience pays.
3. Challenge Collectors
If you receive a collection letter, open it right away. You will be shocked to hear that half of all of active collections are for accounts that were previously paid, belong to another person, or are, for some other reason, not valid. Under the Fair Debt Collections Practices Act you have the right to validate a debt within 30 days of getting a collection letter. This is a powerful credit repair tool. Ask for proof they own the debt and documentation of the balance claimed.
4. Learn About Statutes of Limitation
Collectors have a limited time in which they can enforce collection through the court system. When this time limit, known as the statute of limitation (SOL), expires, they can try to collect, but they no longer have leverage. The SOL is almost always far less than the reporting period limit. Knowledge of the SOL is critical to your credit repair effort. Research the SOL for every debt. If the SOL has expired the debt should be very negotiable.
5. Manage Your Revolving Accounts
Your credit card balances can ruin your credit scores, even if you make all of your payments on time. Proper management of your revolving accounts is important to your credit repair success, and can swing your credit scores by over 100 points. For the best results make sure that your credit card balances are as low as possible. The FICO scoring model will give you the biggest score boost if you use less than 20 percent of the available limit. Do not neglect this essential tip.
6. Avoid Consumer Debt
While your credit card balances can make or break your credit repair effort, the type of debt you utilize is equally important. Do not count on store cards or consumer debt, like furniture store credit lines, to contribute to your good credit. In fact, the FICO scoring model has a built in partiality against consumer debt. If you want to build your credit, stick with mainstream cards like MasterCard and Visa.
7. Monitor Your Credit
An online credit monitoring service can be a valuable credit repair tool. If you join a service like the TrueCredit 3-Bureau Credit Monitoring Service you will be notified of all material changes that occur on your credit reports instantly via email, including inquiries, new accounts, and the appearance of derogatory information. Once you are alerted to the appearance of something you disagree with you can react in a timely manner.
8. Refinance Costly Loans
Once your credit repair program is underway, your credit report is tidy, and your scores are climbing, it is time to cash in on your newly improved credit. Examine all of your debt from your credit cards to your mortgage. All high rate loans are candidates for refinancing. You can start by contacting your current lenders to see if they can offer you more favorable terms. If not, you can shop for the best rates elsewhere.
9. Save Your Money
Your newly improved credit, and the lower payments that lenders have offered you, should allow you to start a savings plan. A savings plan is the perfect complement to your credit repair program. Money in the bank provides a cushion when unexpected expenses arise. You have put effort into restoring your credit; do not let an unexpected expense cause you to fall behind on your bills. Savings is smart.
10. Learn to Invest
Make financial stability and personal wealth the capstone of your credit repair effort. Personal wealth will insulate you against events that once would have caused stress and damage to your credit record. Put the past behind you and realize your true potential. As your saving account grows, explore your investment options. Read and study. Learn everything you can about investment and personal financial management. Your time has come!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
Managing Your Credit Cards for Credit Repair Success
Introduction
Successful credit repair involves a broad approach to cleaning up your credit report and restructuring your credit. Everything matters. But some aspects of credit repair are more potent than others. Among all of the techniques you can use to boost your scores, the proper management of credit cards is the most powerful. Proper use of your credit cards can easily yield a 100 point improvement in your scores. Put these powerful techniques to work today.
Getting New Cards
If you do not have credit cards, now is the time to get them. If you want your credit repair results to really shine you cannot overlook the power of properly managed plastic. If you have had credit issues in the past you may be concerned about being approved. If you are unable to get approved for regular credit cards try secured cards. Secured credit cards are the ideal credit repair tool. If you have no open credit cards right now, two new secured cards will be adequate to get your scores moving up!
The Right Cards
Not all credit cards will benefit your credit repair effort equally. In fact, some credit cards can hinder your progress and may even be harmful. Department store credit cards and consumer credit cards, such as gas cards, are of no value for your credit repair and should be avoided. For score building purposes you should stick with mainstream cards like MasterCard and Visa. Small limits are fine! The key to success is keeping the right balances.
The Right Balances
The credit scoring model used by most lenders is called the FICO model. FICO places a significant amount of weight on the relationship between your account balance, as reported to the credit bureaus, and your limit. For credit repair success it is imperative that you keep your balances low. The FICO model recognizes card limit capacity utilization in 20 percent increments. If you run your balance over 80 of your limit your scores will tumble. But use less than 20 percent of the cards capacity and you will be richly rewarded with higher scores.
The Right Timing
Managing your credit card balances for credit repair success is an art. In theory there is no harm in using your cards to their limit as long as you manage to reduce the balance before the date that the creditor reports the card balance to the credit bureaus. This is not as easy as it seems. Many people pay their balances in full when they receive their monthly bill, only to be shocked to see that their credit report shows that their cards are maxed out. It is unlikely that the billing cycle and the creditors schedule for reporting to the credit bureaus will coincide. For credit repair purposes you may want to reduce your balances and keep them low.
Putting it All Together
Would you like to give your credit scores a powerful boost? Now is the time. Employ these credit repair techniques to harness the power of your credit cards. If you do not have any open credit card accounts, open two new accounts today. If you do cannot get regular cards, get a couple of secured cards. Stick with MasterCard and Visa, and avoid store cards and consumer accounts. And keep those balances low if you want your credit repair effort to pay off. You can do it!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Repair Tune Up For Everyone
Credit Repair Really Matters
Never before has your credit score been so important. And never has credit repair offered such dramatic financial benefits. There was a time, not long ago, when it was enough to pay your bills on time. Lenders would glance at your credit report, and if it looked okay you would be approved. And the interest rate you would receive would be the same as all of the other candidates that were approved.
Changing Times
Credit repair may have made your report look good, but unless there were dramatic problems with your reports you may have gotten little, if any financial benefit. This is no longer the case. Even a small credit repair tune up will pay noticeable financial dividends. The credit markets have changed dramatically, largely as a result of the stress of the post-2006 real estate and mortgage market failures. Lenders now consider every single point on your credit score when evaluating your loan application.
Optimizing Your Scores
To make a credit repair tune up all the more important, the credit scoring model is trickier and less logical that you might think. Once upon a time you would have great credit simply by making your payments on time. This is now far from the truth. You can make all of your payments right on time and still have dismal credit scores. A credit repair tune up will insure that all of the components of your credit report are in proper balance.
Subtle Issues Can Add Up
Your credit repair tune up will include a thorough examination of all three credit bureau reports. Given the importance of each and every point on your credit score not a single item can be ignored. There are a number of reporting issues that many people miss when they proofread their reports. These are compliance issues which should not be on your report as a matter of law, and which can have a significant influence on your scores. All of these subtle little items must be spotted and removed. Included in this category are revolving accounts with under-reported account limits, paid accounts reporting a balance, closed accounts reporting as open, and duplicate accounts.
Dispute For Success
The next step in your credit repair tune up is the dispute process. In addition to the tricky compliance issues already mentioned, all questionable issues should be examined. If they cannot be made sense of, they should be disputed. It is important to keep in mind as you continue the project that the credit reporting system is error prone. And it is not self-correcting. Unchallenged errors can easily linger on your report for years pulling your valuable scores down and costing you money. The credit bureaus do an important job, but given the volume of data, and the number of participants in the process, errors are to be expected. If you do not take action, no one else will. Credit repair is about looking out for you.
Persistence Pays!
The final and essential ingredient in a successful credit repair tune up is persistence. The credit bureaus are large cumbersome bureaucracies. They are not the enemy, but it is helpful to see them just as they are, potentially difficult. You may not get a satisfactory response the first time you send a dispute letter. This does not means that you should give up. Credit repair requires a can-do attitude. If you believe there is a mistake on your report do not take no for an answer. Be organized, remain focused, and you will succeed.
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
A Credit Repair Attitude Adjustment
Credit Repair is Not Hard
Credit repair can be shockingly effective. And it is not difficult. In fact the biggest barrier people face is not in the technical detail of credit repair, it is in their attitude. A small attitude adjustment can make the difference between mediocre results and a life changing outcome. You must approach your credit repair project with an attitude that combines a skeptical view of the accuracy of credit reporting with faith in your own ability to prevail against the corporate machinery of the credit bureaus.
The Shocking Truth
More than three quarters of all credit reports contain errors. This may not make much of an impression, but combined with the following fact you may start to perceive the importance of credit repair in a new light. Errors are not only tolerated by regulators, they are overtly accepted. A close reading of the Fair Credit Reporting Act will reveal that Congress values the viability and the ongoing profitability of the credit bureaus over the absolute accuracy of the reporting system.
The Scope of the Problem
This means that the credit bureaus will only go so far in their quest to eliminate the errors that appear on the credit reports of over one hundred and fifty million Americans. In other words, you must look out for yourself. Credit repair is the answer. Without active intervention on your part the mistakes on your reports are most likely to linger for years, and depending on the severity of the error, this may cost you both money and opportunity.
The Necessity for Credit Repair
Once your attitude about the power, and even necessity, of credit repair in your own life is aligned with reality it is time to confront your credit reports. Let your new perspective light your way. As you examine your reports you should expect to find mistakes. Give yourself the benefit of the doubt. If something does not ring true you should make plans to dispute it. The importance of this cannot be overstated. Every error may be causing you harm.
It is Your Money!
Do not overlook anything, regardless of size or age. Credit repair should be employed liberally. Most lenders utilize some form of score based pricing when determining what interest rate you will pay on any loan you apply for. Even a small difference in your score can make a difference in the cost of the money you borrow. To ignore even a small innocuous looking item today may translate onto an increase in the monthly payments you will make tomorrow. A little attention to detail in your credit repair effort will pay dividends for years to come.
Success is Yours
Lastly, it is essential that you embark on your credit repair project with self-confidence. You can do it! The importance of a can-do attitude will become clear as the process continues. You will find that the credit bureaus are stubborn and cantankerous in their handling of your disputes. You cannot let this stop you. Be resolute in your determination and you will prevail. Expect resistance and do not take it personally. The credit bureaus do not get paid to read your credit repair letters, much less to act on them. But stick with it and you will find that you have more control over your credit life than you ever thought possible.
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
How To Build New Credit For Credit Repair
Credit Repair, the Big Picture
There was a time when the credit repair industry was focused exclusively on sending dispute letters to the credit bureaus. Those days are over. There is no question that intelligent and well structured dispute letters are very effective in cleaning up erroneous derogatory information, and it is a thrill to see these bad accounts removed or corrected. But, as important as credit bureau disputes are, unless you put equal emphasis on building new positive credit you are missing the vast majority of benefit that is available from the credit repair process.
Money in Your Pocket
It is no exaggeration to say that well over fifty percent of the benefit of a smart credit repair program will come from careful building and management of positive credit. Why would you ever settle for a one hundred point increase in your score if you could get a two hundred point increase? The right approach to credit repair can easily mean a difference between loan approval and denial, or the difference between a low interest rate and one that will strain your budget. Over the last few years credit markets have shifted almost entirely credit score based pricing. Your credit score translates directly into dollars and cents, your dollars and cents.
Getting Secured Credit Cards
If hard times have left you with no open accounts you should get back on your feet with two new secured credit cards. Secured cards are the perfect credit repair tool. They will require a small savings deposit, usually two or three hundred dollars. This money is used as collateral to secure the limit on the card and will be returned to you when you close the account. Because these cards are collateralized you will not be denied unless you have previous unresolved issues with the card issuer. They are easy and cheap, and for credit repair purposes, they are every bit as good as a larger unsecured card.
Consider Authorized User Accounts
If you are interested in giving your credit repair program a little extra boost there is another credit building strategy you may consider. If you have a family member with excellent credit that would like to help your endeavor you can ask them to add you to one of their credit card accounts as an authorized user. Once they do this the account should appear on your credit report within sixty days and your credit score will inherit the full benefit of the account as if it were your own. On a cautionary note, you should not consider purchasing authorized user accounts as the software used to calculate your score has a way of blocking these brokered accounts.
Cautionary Notes
If you were choosing between secured cards and authorized user accounts, secured cards are the best long term credit repair option for the simple reason that they belong to you. Authorized user accounts come with notable risks. If your card donor runs his balance up your score will tumble due to no fault of yours. And if for any reason the account goes bad you are likely to have trouble removing yourself, as card issuers usually will refuse to make any changes to the account until it is healthy again. But, if you have the ability to include both secured cards and trusted authorized user accounts in your credit repair program, by all means do it.
Picking the Right Type of Credit
When it comes to credit repair you should build credit with mainstream credit cards such as MasterCard and Visa. There are certain forms of credit that can harm your credit more than helping it. The credit scoring software that calculates your score has a built-in bias against consumer debt including store cards and furniture store loans. So do not assume that because you have a store card that you have the credit profile that you need. This type of credit can be convenient and may have certain benefits, but while you are in a credit repair program it should be avoided. Stick with the basics.
Managing for Credit Repair Results
Once you have your credit cards open it is crucial that you manage them properly. This is where you credit repair effort can really shine. The credit scoring model places great weight on the balances that you keep on your credit cards and the newer the card the more important the balance becomes. For the best score benefit use less than twenty percent of the total credit line on the card. If you let your balances run up to the limit your scores will fall, as much as one hundred points depending on the overall content of your credit report, so spend carefully. If you have this problem, do not worry. Just pay those cards down and your score will pop right back up. Good luck!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.