My Way Credit

Credit Repair Works, But…

Credit repair can do more than clean up your credit reports. It can raise your scores, help you prevail against collectors, guide your debt negotiations, and transform your financial life. But you must do it right. Too many people jump into the process head first without taking time to learn the rules. As powerful as credit repair is, an uninformed effort is almost guaranteed to produce disappointment. Here are the three most common blunders you must avoid if you want awesome life-changing results.

Don’t Believe Your Eyes

Shake off any ideas that you have about the infallibility of the credit bureaus. Your credit repair effort will start with a detailed examination of all three credit bureaus, and you better approach this task with a critical eye. Almost three-quarters of all credit reports contain mistakes. Look very carefully. Expand your area of focus. Score damaging errors include underreported credit card limits, accounts reported as open with balances that are really closed and paid, duplicate accounts that overstate your debt load, and collections illegally reported by collectors that have sold the debt. Your mission is to hunt down and dispute everything that does not look right. Give yourself the benefit of the doubt. Every point matters.

Don’t Wait to Open New Accounts

Many people are puzzled by the injunction to open new accounts now. Your credit repair effort is destined to fail unless you have open accounts in good standing. You need to act today. But there are caveats. Not all forms of credit are useful for improving your credit scores; stick with MasterCard and Visa. In the current credit environment it is likely you will not be approved for regular credit cards. This is not an obstacle. Secured cards are ideal for credit repair; they are inexpensive to open and you will not be denied. Small secured cards are every bit as valuable as high limit cards. But you must manage them right. Here’s how.

Watch Those Credit Cards

The FICO credit scoring model puts so much emphasis on the relationship between your card balances and their limit that a lapse can cost you over 100 points. It does not matter if your limit is high or low, if you let your balances approach the limit your credit repair project will suffer. The FICO scoring software measures your card usage ratios and adjusts your scores accordingly. The lower your balance relative to your limit, the higher your score will be. So get those balances down. And don’t make the mistake of thinking that it is sufficient to pay the cards off at the end of each month. The creditor is unlikely to report to the bureaus at the exact moment that your balance has been paid. If you need your credit scores to be good in the next 60 days get your balances down now and keep them there as long as your scores matter.

Summary

The quality of your credit has never been so important. Your credit will affect your ability to borrow money, get insurance, rent an apartment, and even get a job; you cannot afford to ignore it or take it for granted. Take action today to insure that your credit report is as good as it can possibly be. If you don’t feel up to the task just hire a credit repair service to do the work for you. A professional credit repair service will see that every opportunity to sharpen your reports and boost your scores is taken advantage of. Don’t let your credit life languish. Wake up and do something. A little effort on your part will pay dividends for years to come. Good luck!

Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.

Prepare for Success

Credit repair is capable of cleaning up your credit reports, raising your scores, and turning your financial life around. But you need to be an active participant. To get life changing results you must be prepared to work. Credit repair requires a new mindset about the credit bureaus, persistence, a willingness to confront collectors, the readiness to build and manage new credit, and the determination to organize your financial life. It’s a job! But if you start now you will find that success is yours, sooner than you imagined. Just take the first step.

Finding Every Error

Your credit repair project starts with your credit reports. It’s time to get a new mindset about the credit bureaus. They are not the enemy, but they do make mistakes. Your job is to find and correct them. Or hire a credit repair service to analyze your reports for you. You need to develop a critical attitude. A cursory review of your reports is not enough, you need to go line by line and hunt down every error. Keep an eye out for duplicate accounts, accounts reporting with balances that have been closed and paid, underreported credit card limits, and any derogatory items that you are not completely sure about. When in doubt, dispute.

Persistence Pays Off

Once you start the dispute phase of your credit repair project you need to be persistent. If a dispute is not processed to your satisfaction you should not give up. If you are convinced that there is a reporting error you need to fight back. Respond to the bureau’s verification letter with a firm insistence that they have the creditor research the questionable item. A good credit repair service will always customize follow up letters to maximize the probability of success. Stick to your guns.

Managing Collection Accounts

If you have active collections you need to develop a proactive approach to dealing with them. Once your credit repair project is underway you should never ignore a collection letter as it presents a great opportunity. The Fair Debt Collection Practices Act requires that collectors provide documentation verifying their ownership of the debt on request. But you need to do it within 30 days. If they cannot provide documentation they must cease collection efforts. This process is called debt validation. If you are a member of a credit repair service, make sure to send your collection letter to them promptly so they may contact the collector in a timely manner.

The Importance of Good Credit

Your credit repair effort may eliminate derogatory information on your credit reports, but unless you have open and active credit your FICO scores are likely to be disappointing. The elimination of derogatory information will remove the dead weight holding down your scores, but without the buoyancy provided by positive credit your scores will not rise. Secured credit cards are the best option for most people in credit repair programs. Don’t underestimate the power of a couple of small secured credit cards; they can be worth over 100 points within 6 months.

Solidify Your Foundation

You are making an effort to turn your life around, and you are succeeding! Now is the time to insure that you don’t lose any of your hard won credit repair progress. Create a budget and start a savings account. Don’t think of a budget as an austerity program, it is a way of gathering information about your expenses. Good financial decisions should always be made thoughtfully, and that cannot be done without understanding your own financial abilities. And a savings account will provide a buffer for unexpected expenses so you will not fall behind when an emergency comes up. The best way to build a saving account is slowly but surely. Contribute a small amount from each paycheck. The key is to commit. Your account will grow gradually, and your credit repair success will be assured. Good luck!

Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.