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Self-help Credit Repair - How to improve your score

Posted on: 26th Oct, 2005 01:28 pm
Self-help credit repair is where you make a conscious effort to improve your credit scores. A number of factors affect your credit score; and improving your score requires you to take care of those factors so that you can manage your credit better.

Follow these simple steps to improve your score.

Improve your payment history:
  • Avoid making late payments on your bills.
  • Clear up all your past-due bills as soon as possible.
  • Request an alternative plan with lower monthly payments from your creditor.
  • Negotiate with your creditors to remove charge-offs from your credit report and re-open those accounts.
  • Ask your creditors to erase late payment entries after you start paying on time.
Reduce your outstanding debts:
  • Pay off high interest debts first.
  • Keep your balances low and try to keep your revolving debt to 30% of your available credit.
  • Don't close old and unused accounts rapidly in order to lower your available credit. It will raise your debt-to-credit limit which has a negative impact on your score.
  • Try to close accounts gradually over several months. Verify that the accounts closed are reported as "closed by consumer".
Improve Your Credit History:

If your credit history is less than 3 years you should not open a lot of new accounts within a short period of time. Adding too many accounts within a short interval implies that you are not able to manage your credit properly.

Manage new credit efficiently:
  • Ignore your creditor's suggestion to open up an account with a large credit limit and restrict yourself to a medium credit limit.
  • Do not try to open too many new accounts if you have gone through credit problems in the past.
  • Take your finances and credit into account when planning your budget.
  • Avoid several credit inquiries within a short period; otherwise it will mean that you are about to open multiple new accounts, and this will affect your score.
Use a proper mix of credit:
  • It is better not to have too many installment loans, as they can reduce your score. This is because the payments remain unchanged until you pay off the balances.
  • You can have a combination of credit cards and installment loans or loans with fixed payments as they help improve your score. You need to handle your credit cards efficiently.
You can also contact a credit counseling agency for tips on managing your debts. These agencies are different from the credit repair companies, and they can guide you on how to improve your financial situation.

Once you have checked through the various factors influencing your credit score, try to maintain a stable credit report. A few simple steps will help you in this regard.
  • Try to include positive details regarding your credit profile.
  • Ask your creditors to send your account details and payment history to the credit reporting agencies.
  • Create a savings account at your bank. Your creditors will be convinced that you have started to save and maintain extra funds to pay down your debts.
Apart from practicing good payment habits and updating your credit report, you should monitor your credit report and remove any errors from your report. This will also help you to get a better score.
Related Forum Discussions
i was told that after a chapter 13 bankruptcy ,creditors must treat you the same as paying off the debt instead of showing it as charged off . any truth to that?
Posted on: 27th May, 2006 02:32 am
Hi,

Whatever you have heard of is quite true in case of Chapter 13 bankruptcy. You will find related information in this section provided by Samantha.

Thanks,

Caron.
Posted on: 27th May, 2006 02:56 am
I would like to know if anyone has a chart that shows what percentages of, say late payments, are of a credit score.
Posted on: 03rd Jun, 2006 08:37 am
Can you be bit more clear pls....

What I can make from your point is - what you are asking is bit difficult..

Hope this will help you http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx :D
Posted on: 03rd Jun, 2006 08:41 am
Good url - adonis.

It has some good information.
Posted on: 03rd Jun, 2006 09:41 am
In regards to charge-off accounts I had a couple of them on my credit report due to a divorce, its been 6years now looks like they will be off in 2007. I watch the Suze Orbitz show on building credit. She suggests not to pay off charge off because it might lower your score and not help you and could be worse can this be true?
Posted on: 11th Jun, 2006 06:25 am
What kind of score is needed to open credit cards at department stores. And or what kind of score is needed to purshase a home? Is it the same score needed?
Posted on: 11th Jun, 2006 06:44 am
Pls find your answer here - http://www.mortgagefit.com/discuss/about2295.html
Posted on: 11th Jun, 2006 07:51 am
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