If you are reading this post, possibility is that you might have a few problems with bills payments and your top most requirement is to instantly repair your credit score. Since where we live, it is a credit propelled economy and having a bad credit can really make one’s life miserable. You cannot get a mortgage and can hardly manage to get a good apartment if your credit score is not good. So what can be done to fix this problem and is there anything called an instant credit repair? And just how instant is it? The answer lies in the situation you are and every situation is unique in its nature, so the instant credit repair which is as quick as possible will always relative to your individual situation of the damage done, for how long it has been like this, present financial situation and top of all your efforts. The positive aspect is that there is a solution and it is best that your give repairing your credit score a good try which will definitely reward you greatly. Some people have quickly repaired their credit just within 30 days….. How is that for a starter!!!If you are starting off to repair your credit score, the good news is that you are not alone, there are over 30million people in US alone who have credit bad spots, bad enough to restrain them from obtaining loans, mortgages and credit cards, they usually have credit scores under 620. There is a likelihood that you already have a decent credit but who wouldn’t want to make it even better for lower interest rates in securing car loans and credit cards, and the bottom line is that if you have a desire to own a decent house, a high credit score is the key to it.
Knowing the Credit Score:
Like in everything else, if you want to go about something you must be aware of the present standing. So to improve your credit score you need to know what your present score is. The credit score ranges from 300 to 850, and this three digit number will determine your borrowing costs. The credit score which matters these days is FICO score as it is the mostly used score. You can get your credit score from Fair Isaac Corporation or you can also get it from Equifax credit bureau.
Enough of preamble, let’s see what the eleven steps to instant credit repair are:
First we will see the Don’ts if you want a speedy and quick credit repair:
Don’t apply for new loan if you have ample:
You don’t have to get into more loans if you already have in abundance. On the contrary if you don’t have any installment loans, applying and getting one approved will improve your credit scores. You can also get one installment loan if you are trying to recover from a bankruptcy, this will help you in getting your scores up.
Don’t accumulate all accounts:
Consolidating your accounts means getting balances transferred from a high limit credit account to a lower one or accumulating all your credit card balances on one card. As a rule of thumb it is always better to have smaller chunks of balances on few than one big balance on a single card.
Avoid Missed or late payments:
If you have good credit score like 700 or so, one missed or a late payment can drop it to a 100 plus points. Late payments only hurt good scores than bad ones. If you already have a bunch of negative patches on your credit reports, one more will not affect it much but as a habit avoid it if you are up to improving it.
Don’t get your credit limits lowered:
Having a big gap between your credit limit and your balances is always good, don’t ask your creditor to lower your available limits, this will damage your score more than anything. Unless there is a compulsion from the creditor to get the credit limit lowered or close an account for approving a loan, otherwise don’t do it.
Credit report errors which don’t matter:
Your credit report may carry some errors, there are some which can cost you much but there are some which you don to have to be bothered about, these are:
Your name’s misspellings
Incorrect address information
An old employer mentioned as current employer
Most inquiries
Closed accounts by you still listed as open
Closed accounts by you don’t say closed by customer
When you look at your credit account report, if the incorrect address or misspelled name is because of an identity theft or mixing of data with someone else, you can point that out easily and report that quickly to the concerned authorities. However, if those errors are because of a typo by the credit company or the bureau, it is not worth worrying about.
Now that we have covered the don’ts of instant credit repair process, let’s see what are the do’s. I have categorized them in 7 steps:
Credit report errors which matter:
Since your credit scores are calculated on the bases of information provided by your credit report, there are certain errors which matter and need to be corrected:
Negatives in your report which are older than 7years
If you were declared bankruptcy, negatives older than 10 years
Accounts listed as unpaid though they were included in the bankruptcy declaration
If you paid in full and in time, any account listed as ‘current’ or ‘paid as agreed’, needs to be corrected which may be listed as ‘settled’, ‘paid derogatory’ or ‘paid charge off’.
Reported credit limits lower than they actually are
Negative items which are actually not yours, like late payments, collections or charge offs.
You need to be very careful with charging off of negatives in your report which are older than 7 years and in case of bankruptcy negatives older than 10 years, because sometimes scores may go down instead of going up when you negative item go off from your report. This is because of a oddity in the FICO software used for credit scoring. Due to this error in software predicting the effect of erasing negative items from your credit report is difficult.
Old negative disputes:
If a collections account is there in your credit report which was a result of dispute over an unfair bill from your old internet or phone company, you should continue protesting that as ‘unjust’ or not ‘mine’ if the collection account is there for few years. Collections agencies do not bother for smaller and older collection accounts when the credit bureau investigates your disputed collection account.
Goodwill collection:
If you make a consecutive 12 or more on time payments, the lender might erase previous late payments. If you have a very bad history, you can at least ask for re-aging. For getting that done you need to ask for that in writing for “goodwill adjustment”, this will not only improve the record with the creditor company but will also improve your credit score in general. So, it will never hurt to ask for it but first show them that you deserve it.
Use your old credit cards: It is always recommended from the leading credit consultants to use your old credit cards, on and off in every few months may be for a small amount and pay that off in full upon arrival of the statement. Doing this will help you score good with the credit scoring software as active accounts are given more weight than your non active accounts as creditors stop updating your account at the credit bureaus if you do not use them in every few months.
Beware of your credit limits: If your credit company is showing a lower limit than what you have actually got, your scores may actually get depressed. Most of the lending companies will actually update it instantly when asked. There are credit companies like American Express who never report credit limits; the credit bureaus use your highest balance as your credit limit. But there is a problem with that when you repeatedly charge the same amount every month for instance, 3000$ to 3500$, it will appear to the software that you are maxing out your card every month.
To address this issue you can go on a big spending shopping spree. Or you can pay your balance every month before the closer of your statement period, check the date from your last statement, go to the lender’s website a week in advance of the last date and pay off what you owe. This will not raise your limit at the bureau but will widen the gap between the limit recorded at the bureau and the closing balance; this will boost your credit scores.
Keep balances on the lighter side:
Maxing out your cards and piling up big balances hurt your scores even if you pay your bills regularly every month. What actually is calculated in your credit scores is the balances reported in your last statements. Although paying your balances each month is financially wise, its just that credit scores don’t affect.
You can increase your credit scores if you can limit your balances to 30% or less than the card credit limit. You can do that easily by using a check register or by logging into the credit company website regularly or by using personal finance software like ‘Quicken’, this can update you by downloading your balances and transactions automatically.
Paying down credit balances:
Credit scores improve when installment loans are paid off but if you pay off your credit card which is a revolving account it really boosts your credit scores. It is always good to have a big gap in between your credit limit and balance. Credit companies also like to see that and typically 30% balance of the credit limit you have is a good gap you can maintain on every card. So it is always better to pay off the card which is closest to the given limit.
All the suggestions given above will give good result if you are dealing with mediocre or poor credit score and will do instant credit repair. When you raise your score to 700 any of the steps mentioned will have little positive effect. And if you are dealing in the excellent category 760 and above, you will only be getting few points despite your hard efforts. There will not be any point in putting up those extra efforts because you will already be getting the best rates for credits and best terms for any loans you require.
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