Top Ten Credit Repair Tips

Finance Articles | December 9, 2008

Credit repair is easy if you know how. A leading credit repair consultant offers a power-packed list of credit repair tips to help you shape up your credit and boost your scores. Get ready!

Starting Your Credit Repair Project

Credit Repair is not hard. Take the time to plan your effort and the results will be fantastic. Here is a list of our favorite credit repair tips. Try them together, or pick the ones that look good to you. Good luck, you are on your way!

Reduce Your Balances

The balances on your credit cards can cause a swing of 150 points. If you are utilizing over 60 percent of the limit on a card you are losing points; if you approach the limit your credit scores will plummet. If you really want to boost your scores reduce your balances to below 20 percent of the limit; i.e. if you have a $1,000 limit get the balance under $200 and watch your scores take off.

Increase Your Card Limits

There are two sides to the balance-to-limit ratio. If you don’t have the wherewithal to get your balances under 20 percent of the limit, try to have the limit increased; the result will be the same. The credit markets are pretty tight these days, but it’s worth a phone call to the credit card company. Nothing ventured, nothing gained.

Open Secured Cards to Rebuild Credit

Secured credit cards are one of the best credit repair tools available. If your credit is poor and you cannot get approved for a regular credit card, apply for a secured card. Keep the balance-to-limit ratio in mind and maintain your balances under 20 percent of the limit for the best credit repair results. This is especially important with new cards which are weighed extra heavily by the credit scoring model.

Get a Couple of Authorized User Accounts

For a quick credit repair boost call a family member and have them add you to one of their credit cards as an authorized user. Fair Isaac Corp recently modified their software to block the benefit of brokered authorized user accounts, so don’t bother trying to purchase these accounts online, but legitimate family member authorized user accounts will continue to provide a major credit repair benefit.

Rehabilitate Student Loans

If you are in default of a student loan now is the time to make it right. There is no cause for fear, student loan lenders are required to provide affordable payment options to accommodate your needs. Before you call your lender call the Student Loan Ombudsman Office at (877) 557-2575, they are on your side and will explain your rights. Rehabilitation can even purge the old default status from your account; a nice credit repair bonus.

Validate Collection Letters

If you get a collection letter in the mail don’t throw it away; you will be wasting a great credit repair opportunity. Under the Fair Debt Collection Practices Act you have only 30 days to force the collector to validate the debt. If they cannot provide proof they have the legal right to collect along with an objective accounting from the original creditor they must cease all collection efforts and not report to the credit bureaus.

Give Yourself the Benefit of the Doubt

When it comes to credit repair give yourself the benefit of the doubt. Examine your credit reports carefully, but don’t assume the derogatory information is accurate just because it is being reported. If there is a shadow of a doubt dispute it. Many independent studies have verified that credit reports are likely to contain multiple errors. Put your credit repair rights to work and clean up your reports.

Challenge Collections

Among the worst credit report offenders are collectors. Collectors regularly buy and sell collection accounts. Collectors who no longer own a debt are supposed to withdraw the account from your credit report entirely. Unfortunately, there is no incentive for them to comply with the law, so they almost always let the expired accounts linger. Dispute expired collections and they will be removed from your report.

Underreported Limits

Examine your reports for underreported credit card limits. Recall that your credit score is affected by your balance-to-limit ratios. It is not uncommon for credit cards companies to report your limit as less than it is, or even as equal to your current balance. Just make a copy of a recent credit card statement and attach it to your dispute letter for quick credit repair results.

Call a Credit Repair Professional

If you are too busy to manage the credit repair task yourself, call a professional. A credit repair professional will examine your credit reports and insure that every possible strategy is utilized to correct errors and improve your scores. Either way, it’s your credit; make sure it is as good as it can be.

Article Tags: Credit Repair Tips, Credit Repair, Repair Tips, Credit Cards, Credit Card, Authorized User, Student Loan, Credit Reports

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ABOUT THE AUTHOR

Jim Kemish, a nationally recognized consumer advocate, is the president and founder of Sky Blue Credit Repair, a leading credit repair service since 1989. Jim is also a regular contributor to The Credit Repair Blog, a prominent consumer resource.