A simple plan to help consumers work on improving their credit score.
How do I repair my credit?
It is not possible to repair your credit, especially overnight. Improving your credit takes time and discipline. I don't think you can make a mistake in paying off the smallest balances first. Consumers are counseled to pay off the smallest balance to the highest balance. This way the consumer feels some sense of accomplishment..
First of all, after pulling your credit report make sure you review completely. Mark those items that are incorrect and contact the credit bureaus and dispute those items. Second, find items that are older than 7 years, and contact the bureau and ask that those items be removed. Also, if you have proof of any judgements lowered and paid, send a letter with a copy of this information to the bureaus and ask that this item be removed from your credit report.
Then evaluate your budget and determine the amount that you can feasibly apply towards any collection accounts. Pay these first, and then start working on lowering your account balances. (A side note: keeping your balances at their limit is also a “no no”. Having several credit card balances that are at or over their limit, but are paid on time, can negatively impact your credit score.)
Whatever you do, do not pay someone to repair your credit. First of all, it can't be done, and in some states it is against the law. Credit repair companies claim they can fix your credit, but they cannot do it, they flood the credit bureau with letters, the bureau will then remove the information from your report, normally only for 30 days, but when your creditor re-reports your account information the following month it will show back up. And you will be right back where you started, only poorer because you paid the repair company their fee.
Be patient, it will take 6 months to a year to repair any damage to your report. Stay current on your accounts and do not over extend yourself. Consumers are also cautioned not to close all credit accounts. Close as many accounts as you can, except for the oldest ones, if they are in good standing. By doing this you will show an established credit history. If you have any newer accounts in good standing, keep those too. Resist the urge to apply for new credit. No car loans, credit cards, furniture, etc.
By following this simple plan, you will be successful!
