13 credit repair tips

Are you trying to make a major purchase and are in need of improving your credit score to do so? Our team of licensed Realtors and Loan Officers have decades of experience helping people to repair their credit with the three major credit bureaus. Here are 17 credit repair tips that we have uncovered in our years of assisting others to improve their credit scores in order to get qualified to buy a home. These are all tried and proven methods for getting your credit scores up.

1- Your payment history to creditors that report to the credit bureaus account for about 35% of your given credit scores. This is the most important part of starting to repair your credit. Make NO 30 day late payments to those creditors. This will begin to have a great impact on your credit score. If you have a bill due in a given month make sure that payment posts before the end of the month.

2- Seriously consider setting up auto payments to your creditors through a checking account to assure that there will be no future 30 day late payments.

3- Account balances account for about 30% of your given credit scores. If you want to improve your credit score keep the balances owed on your credit card at about 30% or lower than your available credit limits. If you have a credit card with a $1,000 credit limit keep the balance at $300 or lower for example.

4- Establishing and then keeping accounts open accounts for about 15% of your given credit scores.

Keep old accounts in good standing open. The older that your credit accounts are the better that they are.

5- Establish different types of credit. This accounts for about 10% of your given credit scores. It is great to have revolving accounts and these help your credit significantly when managed well. However, establishing installment loans along with your revolving accounts demonstrates the ability to manage different types of credit.

6- Do not take on more than you can reasonably manage to pay. All you really need is 3-4 accounts reporting on your credit that you are managing well. Excessive credit too fast can have a negative affect on your credit scores. This accounts for about 10% of your given credit scores.

7- Open new trade lines. Credit cards are a great tool for improving your credit when they are managed correctly. There are several types of credit cards. Retail store credit cards, bank credit cards, secured credit cards. Applying for and being approved for 2 or 3 credit cards is a BIG step toward getting your credit scores up. If you do not have the best credit and know it, do not apply for credit cards designed for people with good credit. CapOne, First Premier (secured credit card), JC Penny are easier cards to get if you have challenged credit. Fingerhut reports payments to the credit bureaus and these accounts can help your credit too. We do not endorse nor make any expressed guarantees that you will be approved.

But these are a good place to start if your credit is not the best. Applying for an auto loan, being approved, paying all payments on time, will also improve your credit scores.

8- Being added as an authorized user on someone else's credit card whom is managing their card correctly can also improve your credit scores. The older the card and the higher the credit limit the more it will improve your credit scores. By being added as an authorized user that account would then begin reporting on your credit report each month. Of course you would only want to consider doing this with someone who pays their card on time each month. If they do not then that card would have a negative impact on your credit scores.

9- Increasing your credit card limits can also help improve your credit scores. After six months of on time payments credit card companies will often approve a credit limit increase. Doing this while maintaining a low balance will have a positive affect on your credit scores. It signals that you have available credit yet are not in need of using it.

10- Get current on any reporting late payments and stay current. Credit reports only report payments that are late 30 days or more. If you have a 30+ days late report on your credit that will continue to report until you bring it current. This will kill your credit score. For example, if you did not make a payment in May on your credit card or card or car payment and then make a payment in June. You have just made May's payment and June is still due. If you do not make another payment until July then you have whats called a running 30 day late payment. This will have an even worse affect on your credit scores.

11- Settle collection accounts and charge offs. The goal is to have all your past due accounts marked paid, current, or settled. When it comes to mortgage loans the extent to which this must be done varies.

Contact us for more details. Some debts do not necessarily have to be paid off to qualify for a mortgage loan. Settling these accounts will improve your credit scores. Collection that are 180 days late or more usually go into charge off status. This has a worse impact on your credit then a collection does. If you have collections try and resolve them before they go to charge off. You can usually negotiate the debt with the creditor and often offer a lower agreeable settlement offer. If you settle a debt make sure to get a letter from the creditor or collection company stating that your account has been settled with a 0 balance. You will need that letter to get that negative account off of your credit report. The older the charge off is the lesser affect it has on your credit scores. Do not attempt to settle these accounts if it will cause you to become late on your accounts in good standing. It is critical that you keep your current accounts paid on time.

12- Remove old delinquent accounts that have reached 7 years since their reporting date on credit. Old delinquent accounts greater than 7 years old can usually be removed at your request to the credit bureaus. Removing these will improve your credit scores.

13- Review your credit report and work to fix errors found on it. Errors do happen on credit reports.

After review of your report inaccuracies can be disputed with the 3 major credit bureaus. Just keep in mind that the credit bureaus will personally contact the creditors involved and find out their side of the story. Disputes that are not answered within 30-45 days which happens sometimes but not often will be removed from your credit report. However, if the creditor sticks by the reported debt then the credit bureau will note that on your credit and the debt will remain. You will then have to back up your dispute with proof that the debt is reported inaccurately. Some credit repair companies promise to improve your credit and what they do is simply write the credit bureaus a dispute letter for all your negative collections and charge offs hoping that the creditor does not reply. However, usually they do. If you are trying to buy a home your credit report cannot have any unresolved disputes on it. Keep this in mind if you choose to dispute an account have proof to back it up. If not, then any temporary increase in your credit score will be lost when the lender forces you to remove unresolved disputes from your credit report.

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