Repair Credit Score

Posts Tagged ‘Credit Repair’

But, Have Some Open Accounts so you can establish your credit

If you don’t have any open accounts, then it’s a good idea to try to get some credit in order to prove you can handle it. If you can’t get approved for a credit card, talk to your bank about a secured card. You will need to tie up some money in a special savings account that you won’t be able to touch, but the bank will not deny you the secured card.

For example, you put $500 in savings. You are issued a credit card with a $500 limit.

There is no risk to the creditor, because it will just take your savings if you don’t pay. However, you must pay to establish your credit. Then you use that credit card normally, paying off your balances in full every month. After 6 months of that, the bank will probably give your $500 deposit back and make the card a legitimate unsecured credit card. When this happens, your credit is established. Now you can start improving your credit and Credit Score.

How long does it take to establish new credit?

Sometimes it will take a year to establish the account and new credit this way. The important thing to know is that credit ratings are reported in 6-month increments. Say you buy a refrigerator on credit from a department store with the intention of paying it off quickly in order to build your credit. But, make sure you pay it off over at least a 6-month period. If you pay it off too quickly, it won’t be reported at all, and you will receive no benefit.

Removing Inquiries you did not authorize

If there are inquiries on your Credit Report that you did not authorize, but which appear in the authorized column, you should contact the companies who made them and request that they remove them.

Don’t contact the collection agency

If you have an old account that’s already in collection, there is another reason to leave it alone. If you make contact with the collection agency, you let that agency know that you are alive. Collectors will start calling, day and night, until the account is paid. Don’t reach out and invite all that stress and harassment into your life unless you have the money and are prepared to pay off the account.

Don’t Close Old Accounts

Since the age of your credit history is a factor in your Credit Score or FICO Score, it’s a good idea to keep old credit accounts open. That old department store card that you haven’t used in years can seriously improve your credit rating; as far as the Credit Scoring algorithm is concerned, that’s an account that’s been
in good standing for a long time.

The other important point is that closing an account won’t make it go away; it’ll still appear on your Credit Report as a closed account. It’s better to have an open account with the potential to boost your score.

Don’t Open New Accounts

It’s a bad idea to run around and open new accounts just to boost your credit. You could end up with a lower Credit Score since length of credit history is important, and too much new credit is detrimental. Concentrate first on keeping your existing accounts current.

How do it yourself Credit Repair rebuilds good credit

Once you have gotten rid of the incorrect items that shouldn’t be on your Credit Report, you will have to deal with the things that should be on your Credit Report. Below are the most important steps in rebuilding good credit and repair your Credit Score:

• Make your payments on time every month.
• Don’t incur more debt.

Time heals… even Credit Report and Credit Score

If you do the above, your credit will improve over time, guaranteed. Even when there is negative information on your report, your score will improve. This is because the older the information on your Credit Report is, the less it counts against you. Time heals everything.

If you’ve got negative information on your Credit Report that’s relatively fresh, it’s important that you get caught up on those accounts and work out a payment plan with those creditors.

Don’t touch old accounts!!!

If you have old accounts that you haven’t touched in over 5 years, consider just ignoring them for another 2 years and letting them drop off your report. If you send them any kind of payment now, you “reset the clock” and the information is re-upped for another 7 years. The time limits on your Credit Report are from the date of the last activity on the accounts in question. Therefore, it is better to pay the recent debts first, but eventually you’ll probably have to deal with the old debts too.

Sometimes creditors sell old accounts to collection agencies after 7 years, and then the collection agency may be able to report your account for another 7 years. In this case, the negative information will not go away after 7 years like it is supposed to.