Six Super Credit Repair Tips
June 21, 2009 by Guest Author
Filed under Bad Credit Help
Introduction
Credit repair success has little to do with common sense and lots to do with technique. If you don’t make the right moves, the ones that are favored by the FICO scoring model, your credit repair effort will produce less than stellar results. But make the right decisions and you will be amazed at the quick progress you will see. Here are six super tips to get your credit repair effort on track.
Build New Credit
If you don’t have any open credit cards this tip is for you. Too many people start their credit repair project thinking that they will get a couple of new cards after they have cleaned up their reports. This is a serious tactical error. You need to start rebuilding your credit now. Two new credit cards can be worth up to 150 points on your scores within six months. Don’t worry that you can’t get approved for regular credit cards, just get two secured cards. They are the perfect credit repair tool. You won’t get denied and before you know it your scores will be on their way up.
Reduce Your Balances
Once you have your credit cards you need to manage them for the best credit repair results. Don’t let them go to zero, as the FICO scoring model reduces the score value of inactive cards, and keep the balances low. This is true for all credit cards, but even more important for those secured cards you just got. Ideally you should only use twenty percent of the full amount available. As your balances increase your scores will fall. This is important. A maxed out card can cost you over 100 points.
Avoid Store Cards
On the subject of credit cards, they do not all have the same value for your credit repair project. Stick with the majors like MasterCard and Visa, and avoid store cards altogether, at least while you are trying to rebuild your credit. The reason for this admonition is that the FICO scoring model will lower your scores when it sees that you have chosen to utilize this typically inferior form of debt. Store cards are doubly dangerous because they are typically approved for very small amounts, often just above the amount of your purchase creating an instantly maxed out account.
Cool Your Jets
While you are working on credit repair it helps to minimize the amount of credit activity that you engage in. Open two new secured credit cards as mentioned, but otherwise avoid excessive activity. New inquiries have a small impact on your credit score, but they add up. In addition, new accounts will depress your scores for the first few months they report. In the case of new secured cards this is a necessary sacrifice that will pay off in a big way over time. But, for the moment, cool your jets and let the good stuff happen.
Validate Debts Quickly
If you receive a collection letter open it! Don’t stick it in the drawer until you have the nerve to deal with it. The Fair Debt Collection Practices Act requires collectors to provide proof that they have the legal right to collect, as well as an accounting of the amount of the collection. But they only have to do this if you ask for it within 30 days of getting the collection letter. This process is called debt validation and is a valuable aid to your credit repair effort. If the collector cannot validate the debt they must stop collection efforts and must not report the account to the credit bureaus. If they do validate the debt you will have the information you need to consider a negotiation strategy.
Get Some Credit Repair Help
You don’t have to do this on your own. There are many reputable credit repair services that will help you reshape your credit reports and improve your scores. In addition to the strategies noted above there are dozens of powerful credit repair techniques that might fit your needs. Many busy people opt to hire a professional credit repair service rather than trying to learn the entire process from the ground up. If you are busy and don’t have the time to do the job properly, just hire a pro. You will be glad you did!
Copyright © 2009 Ian Webber. All Content. All Rights Reserved.
Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida. Article Source:http://www.articlesbase.com/credit-articles/six-super-credit-repair-tips-979911.html
