Credit Repair 101:1 Year to Better Credit. Straighten Up & Fly Right

Even jet-setters can run into turbulent financial situations. I wanted to share a few tidbits of information of how to smooth out some of the rough spots. Lets get on the road to better credit and a sky high credit score.

Its helpful to be organized and stay diligent with removing things from all 3 of the credit bureaus. I kept a plain folder for each of the bureaus correspondence and report updates. Remember this will take time, nothing will happen over night...so be patient and keep track of all of the paperwork.

...These steps helped me increase my score by 50+ points and still climbing. Tailor them to your credit situation and repair needs.

#1 Pull All 3 reports and scores

You are entitled to a free credit report every year. Or if you will be continually monitoring your progress its also a good idea to sign up for monthly monitoring thru one of the credit bureaus.

https://www.annualcreditreport.com/cra/index.jsp

http://www.equifax.com/home/en_us

http://www.transunion.com/

http://www.experian.com/

#2 Look at ALL old debt if its over 7years old have it deleted, due to its over the limit of statue for collection and should no longer be reported. Simply dispute it as over 7 years with the credit agency.

#3 Look at debt that under 7 years, but still old. Mail those accounts a Debt Verification letter. 

http://www.creditinfocenter.com/forms/sampleletter9.txt

Basically the collection agency or company listing the debt has to verify they have the right to collect on the debt and prove you owe them the money. They have 30 days to submit it to you in writing. You mail the Debt Verification Letter to the collection agency via certified mail so you have record of when it was sent etc. If they don't respond you can then dispute the info to the credit agencies and send them copies of the letter and certified mail receipt to prove 30 days has passed. Those accounts should be deleted.

#4 OK the collection agency verified it....Instead of paying them and it still sits on your credit. Send them and offer to pay to delete.

http://credit.about.com/od/debtcollection/a/payfordelete.htm

#5 Re-establish your credit...open a secured or unfortunately a high interest credit card, or store card.

You NEED 3-4 lines of credit open to establish and PULL UP your score. Creditors prefer to see a balance not all revolving credit...meaning 2 lines of credit * major card, gas card or store card* and 2 installment accounts * car, personal loan, etc*. 

It also a good idea to have a secured personal loan with one of the banks. A "secured personal loan" is considered a installment account. I used $1,500 to open a CD as collateral and they approved the loan. I also have a line of credit with each bank. 

You could also get a secured credit card with most banks, or with high interest credit cards designed to help people with less than desirable credit rebuild. Orchard Bank is a good example.

https://www.orchardbank.com/

 #6 Do not allow your account balances to exceed 30% of the limit. For example if you have a credit card limit of $1,000.00 only use up to $300.00 of the limit. Try not to carry a balance each month if possible. And of course ALWAYS pay at least the minimum amount due each month. But paying more is helpful to keep reporting balances low. 

Remember your credit did not go bad in one month..so it will not be repaired within 30 days. Be patient with the process and allow at least 3-6months to see improvement. Your score increases the longer good established accounts are reporting...Keep time on your side, with good financial habits.