Repair Credit Score

Posts Tagged ‘Credit Report’

Question: how long after i pay a credit card in debt collection will my Credit Score start to repair itself? and…?

will it ever be fully repaired and if so (because the rest of my bills are always paid on time), how long would it take?

Answer: Usually, a couple of years after negative items are paid off, your score will start to rebound. However, your Credit Report will reflect the negative entry (even a paid off collections item is a negative) for 7.5 years after last activity and will be seen by any future creditors who pull your Credit Report during that period. A good payment history for a couple of years after a negative will make some lenders look at you more favorably (for example, if you are trying to get an FHA home loan, your most recent two year payment history is more important than your Credit Score, but you will still need a minimum FICO of about 620 and a minimum 3.5% down payment to get any lender to underwrite the mortgage) , but not all will do so.

If you do pay off the collections account, see if you can get (in writing) an agreement to “pay for delete”. That way, the collections item will be removed. However, the original charge off item will remain for 7.5 years from the time it was first reported.

Credit Repair FACTS: info from the Credit Secrets Bible

When you suspect that your Credit Report contains incorrect information, you should write a letter disputing Credit Report to the credit bureaus. In this section of Repair Credit Score, we provide a free sample letter disputing Credit Report which you can send to the credit bureaus.

What should letter disputing Credit Report contain?

The sample letter disputing Credit Report contains:

• you name and address
• name and address of the credit reporting agency whom you are sending the letter disputing Credit Report
• date of your letter disputing Credit Report
• your file or Credit Report number
• list of errors on your Credit Report
• reasons why you think those items on your Credit Report are incorrect
• what the items on your credit report should be
• ask the credit bureau to correct the errors
• ask to hear from the credit bureau within 30 days

Our sample letter disputing credit report includes all the above vital information. Below is the sample letter disputing credit report.

________________________ (your name and address) ________________________ ________________________ ________________________ (name&address of credit bureau) ________________________ ________________________ __________ (date) Dear Sir or Madam: Recently I received my credit report from your agency. My credit file or credit report number is _____________. In reviewing my credit report, I noticed that following error(s). ________________________________________________ This item is incorrect because ______________________ and should instead indicate ________________________ ________________________________________________ This item is incorrect because ______________________ and should instead indicate ________________________ ________________________________________________ This item is incorrect because ______________________ and should instead indicate ________________________ I would appreciate it if these errors could be corrected. I look forward to hearing from you within thirty days. Sincerely, ____________(sign and print your name)

The above letter is a free sample letter disputing credit report. You can modify this free sample letter disputing credit report to suit your credit dispute purposes. There are also other free sample Credit Repair letters available on various sections of our Repair Credit Score website.

Amount you owe & how Amount you owe can improve your Credit Score

Amount you owe is the amount you currently owe for your credit cards, mortgage, car, etc. Amount you owe is on your credit history and Credit Report. This can be good or bad, depending on how much you owe compared to the limit you have.

It is best to not max out your credit cards. Your Credit Report is based on the amount you owe on your credit card compared to the credit limit.

For example, if your amount owed as a percentage of your credit limit is:

• 0-30%: This will improve your Credit Score
• 30-60%: This is ok for Credit Score
• 60-90%: This is not good for your Credit Score

Your Credit Score will be higher if you have a large line of credit and only owe 0-30% of the credit line available in your name.

Does having no debt improve Credit Score?

No. It is the ratio of credit line or credit limit and your debt that determines how good your Credit Score is. For example, it is better to have three credit cards of $10,000 credit limit and only owe $2,000 than having one card of $3,000 credit limit and owe $2,000.

Mortgages and Credit Score

Mortgages are on your Credit Report. If you have many loans you don’t want to continually go to the same bank. Your mortgage broker will help you (he gets paid if you get your loan). Be up front with your mortgage broker about your loans so he can shop at different banks. If he doesn’t know where your other loans are he might try to get you a loan at a bank where you already have a loan and they could deny you.