How to Get Back your Good Credit Rating

So many things we do every day are dependent on a good credit rating. Try getting a credit card, renting an apartment, financing a large purchase, or buying a car, just to name a few, without good credit, and reality will set in.

If you don't make payments to creditors on time or you miss a payment, you are reported to the credit bureau. The credit bureau, in turn, adds this to your credit report. If you are guilty of habitually being slow in making payments, or default on a loan, you will suffer a bad credit rating and a low credit score.

Many doors will be closed to you when your credit score is low. You will have a hard time getting a loan, a credit card, renting a car or doing many of the other things you have grown accustomed to. A bad credit rating might even keep you from obtaining certain jobs. For these reasons it is important that you protect your good credit rating. If unforeseen circumstances have affected your credit worthiness, you should start repairing your credit as soon as possible.

How to repair your credit rating is usually a slow process. You need to build your credit rating little by little over a long period of time. Although you might consider going to a reputable company offering credit repair services, you can repair your own credit.

A good place to start repairing your credit right away is to get your credit report from the credit bureau, and examine it carefully for errors. If you don't find any errors, you can then begin repairing your credit.

First, get a secured credit card and use it regularly but cautiously. Make your monthly payment amounts on time and in full. Secured credit cards are issued by companies that usually cater to people who have bad credit, and you are usually required to give an initial deposit equal to the card's credit limit. For example, you give the company $500 for a card with a $500 credit limit. They are authorized to use that deposit against any balance you have that remains outstanding for too long. As you can see, by doing this, the credit card company does not assume any risk because you will never owe more money than they are holding as your deposit.

Secured cards also require annual fees that most regular credit cards do not. Using secured credit cards and paying the bills on time is one of the best ways to start improving your credit rating. Your goal is to develop a history that shows lenders that you take your debts seriously, and that is the only thing lenders require from you. They want to be paid in full and on time. Paying bills on time helps you establish a good history, and it eliminates late fees and other financial penalties that make paying off your debts so difficult.

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Credit Dispute Dangers, Avoid Red-Flagged

The first thing you should know is that the credit reporting system is rigged to serve corporate interests first. The key to repairing your credit score quickly is knowing how to safely (and legally) maneuver within the consumer protection laws. Your goal is to beat creditors and collection agencies at their own game, and force the credit bureaus to help you do it.

The law is on your side. Nobody wins if you spiral down to bankruptcy.

Dirty Little Secrets: What the Credit Bureaus Won't Tell You by Jason R. Rich For anyone who is about to buy a home, refinance their mortgage, buy or lease a car, apply for credit cards, or make any type of large purchase Includes in-depth interviews with credit experts from well-known companies Includes sample letters that can be personalized and sent to credit bureaus and creditors to speed up the process of updating and/or correcting credit reports Compact, concise guide with low price point

There's no shortage of information on the internet about credit repair strategies. Filing credit disputes is a favorite. But tread carefully. Much of the information floating around out there is self-serving... Made-For-Adsense content that exists only to get you to click advertiser's ads... or a masquerade secretly (or not so secretly) shilling for some pricey "credit repair specialist." If you visit enough credit repair sites, you'll begin to notice that the same drivel is recycled again and again.

Here are a few drivel-free insider credit dispute secrets to get you started...

1. Boilerplate credit dispute letters almost always do more harm than good.
   As with medical diagnoses, blanket prescriptions for credit repair can be dangerous. Make the wrong moves and you'll actually drop your credit score! Plus, credit bureau investigators don't take boilerplate letters seriously -- especially boilerplate threats. They feel that the consumer who takes the time to write a concise, legally binding letter is more likely to hold the bureau's feet to the fire until they get what they want. They know this type of consumer is more likely to report them for FCRA violations, and more likely to sue.
2. Don't dispute negative credit items online.
   Send all dispute letters by U.S. Postal Service Priority Mail, Confirmation of Delivery -- no signature required. The credit bureaus typically refuse letters which require signatures. If a credit bureau doesn't properly verify your disputed item, you'll need the paper trail to gain the sort of leverage which will force the bureau to delete the item.
3. Don't file frivolous disputes.
   For example, don't pretend to the credit bureaus that you don't owe a particular debt when you do. That's a good way to get red-flagged and lose your right to dispute. Plus, such a ploy is highly unlikely to accomplish your goal of getting the negative item removed.
4. Dispute factual inaccuracies, and file foolproof disputes.
   The good news is that you can almost always find a factual dispute, if you know what to look for. You must learn how to identify which disputes will actually lower your credit score, or worse -- get your credit file red-flagged, which will cost you the right to dispute for up to 12 months!

Credit Secrets: How To Erase Bad Credit by Bob Hammond This expanded Credit Secrets will save you thousands of dollars in fees, finance charges and interest payments as you learn the very latest techniques to get rid of debt once and for all and establish good credit. Discover proven tricks used by lawyers, credit counselors and other pros who charge handsomely for their services.

Now, many credit courses and so-called credit repair specialists will tell you to dispute every single negative item in your credit file in the hopes that all those items will simply vanish because your creditors are too lazy or too busy to respond to the credit bureau's request for verification, or because the credit bureaus are too lazy to verify the item. Rarely happens that way, and it's a good way to get your credit file red-flagged. This "bazooka gun approach" is dangerous. The credit bureaus may very well be too lazy to investigate some items (and you can indeed use that for leverage), but not all of them.

Your success will lie in properly executing the Triage phase -- collecting and organizing every tidbit of ammunition that could be used as leverage to erase negative credit items -- and in sending (and documenting) the right series of letters. Credit histories can turn on a dime -- both positively and negatively.

Above all, your goal should be fast, safe credit repair. Often, the smallest changes can have an enormous impact on your credit file. With a little work, you can become the person every choice lender wants to loan money to, and in a relatively short period of time.

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Technorati Tags: Credit Dispute, Credit Repair

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How Long Does Credit Repair Take?

If you are looking for a quick fix to your bad credit read no further. Real credit repair is hard work, time consuming, and an ongoing affair. For whatever reason your credit needs fixing, be it a divorce, bad personal decisions, loss of job, or any other of a hundred and one reasons, it can be accomplished, but with time and effort. How much time? Seven years on average for most bad debt situations, excluding instances where a bankruptcy is filed. When a bankruptcy is introduced into your credit file, it will stay put for an average of ten years! Those lengths of time in reality are longer. They start from the time the information was listed or filed, not from when the debt occurred.

The Credit Repair Handbook: Everything You Need to Know to Maintain, Rebuild, and Protect Your Credit by John Ventura How to identify problems with credit, rebuild credit histories & boost credit scores, & protect credit from identity thieves. Comprehensive, thorough, and up-to-date, this is the only guide readers will need to get your financial lives back on track.

Disputed Information in Your Credit Report:
Your first defense in cleaning up your credit file should be to know what is in it. The three major credit-reporting agencies are Equifax, Experian and Trans Union. If you have recently been denied credit, you may be entitled to a copy from the reporting agency free. Laws are also under way to ensure everyone has the right to a free combined report yearly. For now, a copy of each can be purchased from the individual agencies for a nominal fee. Once you have the reports, go over them carefully. If you notice any errors, file a dispute report. Information from each company will be included with the reports on how to file. Transunion offers convenient web access to file a dispute instantly. Be aware that when a dispute is in progress it is best not to apply for any new credit. Most disputes will be resolved within thirty days. A note of caution: Be sure to only dispute actual discrepancies. Frivolous disputes are not treated lightly.

What Can You Dispute:
All errors. For example, upon recently applying for a car loan, I was denied. I had what I thought was good credit. Upon receiving a copy of my credit report, imagine my surprise when it came and showed active accounts for not only my current mortgage, but a duplicate for the same…My bank had recently been acquired by a larger bank. Account numbers were changed, but no one notified the credit agencies that the old loan numbers were closed. It looked as if I was paying for two houses on my relatively modest income. The same for an overdraft account on a checking account through the same bank, and what was actually a checkbook balance to the good, showed as a loan. We still have not actually figured that out, but it was removed successfully from my credit report.

FTC:
The Federal Trade Commission can offer additional assistance to consumers who believe they are not being treated fairly.

Assess:
Assess how you got where you did. Be honest with yourself if there is any doubt about how you have arrived where you are. If the reason for your bad credit is a one-time life occurrence, such as the death of a spouse who was under insured and the main breadwinner for instance, the outlook may be bleak, but probably not as bad as you think. If you have a tendency to buy first and think later about how you are going to pay for that must-have purchase, take an honest look at how these ‘purchases’ affect your life.

Interest:
Oftentimes, people are truly astounded when they look at how much interest costs them on a month-by-month basis. Everyone, seemingly, wants to get credit at a low rate, but even those that truly shop for the best rate they can qualify for, often do not look at the actual cost their credit costs them from month to month. Pull out your statements and look at the bottom line: How much of your payment went towards the principal? How much went towards the interest? Quit a shocker, isn’t it? This is the fastest way to explain why it is necessary to pay as much as you can afford on any money owed. For every dollar paid towards the principal amount owed, it will be that much more, additional interest saved.

Keeping Out of Debt:
Once you have found the edge of your debt and crawled over it, keeping from falling back in, can be as hard, or harder, than it was to get out. You suddenly feel rich, like all the burdens of the financial world you call life, have been lifted. Stay strong, be realistic, and make a list. A list? That's right, a list of goals, wants, needs, etc., along with a budget, will give you hard insight into what and where your money needs to be spent on. If you are not by nature a list maker, you may scoff at this, but try it. Pick up a notebook from the local dollar store, and within its pages; map out a budget. Start with the basics, such as mortgage/rent, insurance, utilities, vehicle expenses, including car payments, insurance, and gasoline, and don’t overlook groceries, annual bills such as tax payments, or visits to the vet for your dog or cat’s yearly shots. Be generous when you mark down what you spend on each item, do not mark less, thinking you can get away with spending $50 a week on groceries, when you know you currently spend at least twice that much. You may be able to spend only the $50, but at this point, we want the ‘big’ outlook of your spending.

Next, make a list of things you would truly like to purchase in the next year or two. Also, make a note of how much you spend on holiday shopping, and other gift giving, such as birthdays for both family and friends. This list may grow in the coming days, as you remember this one or that, but do not worry, that is why we are making the list. Often overlooked when making a list such as this, but that should be a priority, are two items: Savings and fun money. If you tell yourself that you are going to put away a set amount off the top of each check for savings and do it, after a learning curve, you truly will not miss it. It may hurt at first, but once you see that amount grow, it can actually be a bit addictive and you will find yourself trying to save a few dollars extra here and there. The fun money is just as needed, even if it is only $5 a pay period. You work for the money. Do not begrudge yourself a favorite magazine or a couple of lottery tickets, if you truly obtain pleasure from purchasing them. Now, once you have down all the expenses you can possibly think of, write down what your earnings are. If the bottom line does not meet what your expenses are, see if you can trim your expenses anywhere. Be realistic; remember you do have to eat! If the figures do not add up, and you have cut everything you can, think about ways to increase your income. A second job, a possible raise, selling a few possessions, even a stay at home spouse taking on a part time job. A few final words: Keep a perspective of your spending. It is only money and it will only do what you allow it to do.

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Your Credit Repair: Date of Last Activity

When repairing your credit, one of the most important items on your credit report is the date of your last activity. To verify the dates of your accounts last activities, you need a copy of your credit report. Your credit report will give you all the information on past and present accounts. To get a copy of your credit report you can contact your credit bureaus and they will send you a copy of your most current credit report. There are three credit bureaus that you can contact: Equifax (800) 685-1111 www.equifax.com; Experian (888) 397-3742 www.experian.com and Trans Union (800) 916-8800 www.tuc.com

• Tips on Choosing Your Credit Repair Company

The last date of activity is when the credit bureau lists on your credit report the actual last date of any transaction that was done to your account. That date can be the actual last time you charged an item on your credit card, the last payment you made on an installment loan or when you paid off an account. The date of last activity can also be negative. It can state when an account went into collection, the date it was charged-off, the maximum delinquency date and the date when someone inquired about your credit. Your last activity date will tell you and anyone else how you handle your credit. Creditors review your last date of activity to see when you made your last payment on an account or when you paid off an account. This can help you get new credit if everything is paid on time and as agreed. If your last date of activity shows something negative like a charged-off, collection or a delinquent account, you could become a credit risk. The last activity date is guidance for good or bad credit.

To repair your credit your first step is to find out exactly what dates are on your credit report. This will tell you how bad or good your credit is. Also it will let you know if you should apply for any new credit. If your last dates of activities are all coming up negative, you will not be able to get any new credit. The date of last activity will also tell you if any of your accounts have expired. If you don’t check your credit report you won’t know what accounts have expired to be removed from your report. Keeping up with that will help repair your credit report by watching your dates to inform the credit bureau which accounts needed to be dropped off. Bankruptcies stay on your report for ten years, whereas a tax lien can stay on your report indefinitely. Collections, judgments and delinquent credit will stay on your credit report for seven years. You need to know the date these items were placed on credit report and how long it will be before they are dropped off.

The date of your last activity is very important. Those dates should be taken very seriously along with any other transactions on your credit report. You are responsible for keeping up with your activities dates and your credit information placed on your credit report.

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