How Can You Improve Your Credit?

It’s not impossible to improve your credit. In fact, there are many good, effective ways to make some big changes, regardless of your credit history. But understanding what’s on your credit report and what’s holding you back is the first (and possibly the most important) step.

What most credit repair companies are doing…

With most credit repair companies, there’s no such thing as a careful assessment of your credit profile. They’ll simply lead you through a brief and very standard dispute process, attempting to have as many negative items removed from your credit report as possible.

But this is often ineffective and can even be dangerous because:

Disputing accurate or verifiable items can get you sued
Negative items are often only removed temporarily
Any items that are verified will remain on your report

By having a reasonable understanding of your credit situation and the challenges you’re faced with, you can make better, safer decisions throughout the process and you can develop a plan that’s tailored to your specific needs. Credit repair companies that skip this part of the process can only take you so far with your credit, and they can easily complicate your effort and make matters worse.

Here’s what these companies may overlook by focusing solely on generic dispute letters:

• Negative items that are within the statute of limitations: essentially, these are the items that often result in lawsuits. Creditors and debt collectors have an allotted amount of time to take action against you for the purpose of collecting unpaid debts. By disputing an item that’s within the statute of limitations, you’re bringing your debt to their attention, and you may just prompt them to sue.

• Disputing with credit bureaus may not be as effective: most companies dispute solely with the credit bureaus. But oftentimes, credit report errors are a result of the data provided by an original creditor or collection agency, making your dispute with the credit bureau obsolete. If you want to get to the source of your credit report issues, you’ll often have to go to the original creditor or collector—a service most companies don’t offer.

• Generic, groundless disputes are often deemed “frivolous” by credit bureaus: credit reporting agencies receive tens—if not hundreds—of thousands of dispute letters each day. If it appears that you’re simply mass-disputing credit report information just to have a better-looking credit report, your disputes may be declared frivolous and you won’t be getting the results you’d hoped for. Clearly, attempting to dispute away a lifetime’s worth of bad credit is not a good idea.

 

The alternative to generic dispute letters

Disputing with credit bureaus, collection agencies and creditors is often an important part of credit repair. But this approach should be used with discretion. Make sure to only dispute items that seem inaccurate, outdated, misleading or in some way questionable. If you dispute appropriately, you can probably expect to get much better results.

If there’s anything remaining on your report after the dispute process, you can resolve them by taking a different approach…

 

Debt settlement and paying for deletions

The root of most credit problems is usually, in some way, unpaid debt. Resolving unpaid debt may seem impossible to some, but tens of thousands of people are getting out of debt fast & easy by negotiating debt settlements.

Debt settlements are way of having your debts reduced to an amount you can afford to pay by negotiating with creditors and collection agencies. In most cases, convincing them to agree to a reduced amount is easy because it’s a chance for them to finally collect on a debt that’s long past-due and not likely to be paid before the statute of limitations expires. On average, it’s possible to have your debt reduced by as much as 60% with proper negotiation.

 

Once your debt is paid:

you don’t have to worry about creditor harassment, lawsuits or judgments
your credit report will indicate that the debt has been paid in full, or
you may even convince them to remove the item from your report altogether

Paying for deletions

During negotiation, be sure to suggest a “pay-for-deletion.” As part of your settlement terms, creditors and collectors might agree to totally absolve the item from your report upon payment. If you can pull this off, you’ll probably see a fast rise in your credit score.

 

Good faith and Good will letters

Finally, good faith and good will letters are useful in having honest mistakes you’ve made with your credit forgiven and removed from your report. If you’ve had a reasonably good history of paying on time each and every month, you may be able to convince your creditors to “overlook” some negative marks such as late or insufficient payments.

If they agree, you can expect to have these removed from your report, as well.

The final step: establishing and maintaining a healthy credit profile

Your level of revolving credit helps to make up about 30% of your credit score, and having the right number of credit cards is key to making improvements.

Having too many credit cards can make you seem stretched thin with debt
Not having enough cards can fail to establish a sufficient credit profile
Typically, the recommended number of cards to have is three to five

If you don’t have a sufficient number of credit cards when you’re finished with your credit repair, this should be your next focus—believe it or not, adjusting the amount of credit lines you have even just slightly can raise your credit score by as much as 60 points in just weeks.

Keep your cards active for as long as possible
Keep your balances low—below 20% of the limit is recommended
Make your payments on time (and in full, if possible)every month
Don’t make another mistake with your credit—improve it the right way

Don’t make another mistake with your credit—improve it the right way

Regardless of your credit history, your credit score or your level of debt, it’s possible to improve your credit rating.

Avoid the companies that cut corners or take a limited approach to credit repair, and find one that focuses on your individual needs and concerns. Generic strategies such as frivolous disputing just don’t yield the results you’re looking for.

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How to improve bad credit | Improve your credit fast | Improve your credit score | Improve your credit rating | Improve credit after a bankruptcy | Improving your credit using credit cards