What Credit Repair Steps Are Required To Increase Your Credit Scores

Posted on by Forest in Debt, Guest Posts, Saving Money & Finances

This is a post by guest blogger Darin Sewell, the founder of Credit Fix 123

What Credit Repair Steps Are Required To Increase Your Credit Scores

The current economic circumstances around the world have led most banks and lenders to tighten up their guidelines in order to stay profitable and avoid losses. This means that the good old days of being able to secure loans with bad or even marginal credit are long gone and have been replaced with strict guidelines. Unfortunately for most consumers these guidelines also call for credit scores over 720 which sadly many of us do not have. The good news is that there are credit repair methods you can use to get your credit scores improved to higher levels and many are not hard to accomplish, let’s look at some of them in more details below!

First off one of the best ways that you can turn your credit around is to stay current on any credit account that you have open. Even if you have been late in the past you can still benefit from developing an on-time payment habit. You see most credit cards only report the last 12 months of activity to the credit bureaus so if you had a late payment 6 months ago you will be clear in 6 more months as long as you continue to pay on time. And a clean payment history will really jump your score anywhere from 25-75 points!

If you find that you cannot pay on time due to job loss or other hardships make sure to call your lender before you get into too much trouble. Many of them have programs that will help you stay current on your credit cards and loans without having your credit negatively affected! It may take a bit of work and a few phone calls but in the end the lender wants to help you pay what you owe them so use that to your advantage to work out a plan!

The second way to really get your credit score increased is to pay down the balances on your existing accounts. You see, the credit scoring algorithms look at accounts that are over 50% of the limit as risky and will decrease your scores because of it. If you can get your accounts balances down to under 50% of the limits, your scores will really shoot up on average between 25-50 points.

I know what you are thinking; there is no way I can pay down what I owe very fast. I say yes you can! You see, you can easily pay the minimum on some accounts and pay extra on the accounts with the highest balance to limit ratio. Then look at all of your expenses and cut the fat out and use the money you save to pay down your credit cards. Tackle them one account at a time and within a reasonable amount of time you will be surprised at the amount of debt reduction and score increases you can make!

One more way that you can help your score increase is to keep your seasoned credit accounts open and in good standing! This is critical because along with how much you owe the credit scoring system also looks at how long you have had your credit accounts. Basically it will boil down to this, someone with a near maxed out card they have had for 10 years looks a lot less risky then someone with a near maxed out card they have had for 6 months. So concentrate on paying down and maintaining your current accounts instead of doing balance transfers and chasing after lower interest rates and better deal. Plus once you get your balances paid down and your credit score up you can call and ask your lenders for lower rates!

On final thing that many people fail to realize is that you can dispute items and information on your credit report that are untrue. In most cases these incorrect items will be causing harm to your credit report. Types of items you may find are false balances, mis-reported late payment or even accounts that are not yours! Disputing these items is an easy process to do, you just have to review your credit report and file a dispute with the credit bureau through certified mail or online. While it may sound hard it is actually quite simple but will require an investment of your time and effort. If you are interested in doing this yourself there are many good self credit repair courses and software available for purchase online that can help you accomplish this task, they are usually priced between $37 to $97.

Or if you are short on time or feel the job is too big for you to do on your own, can also employ a credit repair company to help you dispute items on your credit report. There are many good credit repair companies offering their services and many have great track records. On average most of these companies will charge around $50 a month plus a small one-time set up fee to work on your disputes, and most people need 3-6 months of service to make a difference. One thing to keep in mind regarding credit repair companies is they will all do basically the same thing and the only thing that is going to separate these different companies is the contract, guarantee and reputation. So make sure you carefully review both of those items and make sure you stick with a well known national company and check with the Better Business Bureau for complaints before you sign up with a credit repair company!

Probably the most valuable piece of advice that I can give you in regards to improving your credit score is just make sure that you go into this process with the right mindset and are fully aware that miracles will not happen overnight and rebuilding your credit scores will take time. But with good habits and the proper plan you can have your scores rising quickly within a few months. Just make sure you stick with your efforts and do not give up!

Tags: credit cards, credit repair, credit score