Credit Repair Strategies

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Todd Ossenfort, chief operating officer at Pioneer Credit Counseling, says that credit repair is a matter of time and patience. He often fields letters from people who complain that their credit scores don’t increase after they pay their debts off. Delinquent account holders cannot expect a magic wand to remove those blemishes overnight; instead, the late payers will have to suck it up and wait seven years. It is always best to pay back old debts rather than just ignoring them and hoping they will go away over time. Time won’t stop harassing creditors from calling or lawyers from taking you to court over an unpaid bill. “All you need is a little patience to give the positive information on your accounts some time to outweigh the older negative information,” Ossenfort writes back. “As your credit history continues to have positive information added, with new accounts paid on time, etc., your credit score will improve.”

If you’re wondering how to bring up a low credit score, then you’ll be happy to know there are a several ways to do so. Your first port of call is to check your free credit score with Experian, TransUnion and Equifax and be sure to be on the watch for any facts about identity theft while you are reviewing your credit report. Once you see what you're dealing with, you'll know where to begin in the quest to repair your credit. Next, pay off all your debts, beginning with the highest interest credit cards first. If you need help with this area, then you may want to consult a credit repair attorney. While you're paying these off, it's important that you do not close your accounts, as it will look like you're using a larger portion of your available credit. Lastly, look into getting what is known as “good debt,” such as a mortgage, a school loan, a car loan or a self-financed installment loan; anything that will prove you can be trusted to once again stick to a monthly payment plan.

If you go through a credit card debt reduction company for your credit repair, then you’ll pay the team a small fee to negotiate with your creditors on your behalf for settlement offers. If you’ve let the interest and late fees build up and you’re drowning in debt, then this may be a good option for you. Instead of trying to finagle tons of payments, you’ll just pay one monthly payment to your debt reduction counselor and he or she will then distribute payments to your creditors. Granted, if you don’t feel timid about dealing with these bill collectors yourself, then you can often get similar deals on your own. Many people just feel more comfortable letting a professional negotiate on their behalf, which will effectively end those annoying phone calls and threatening letters as well.

Beware of credit repair scams. The numbers of complaints against credit repair operations have increased 38% since 2004. To protect yourself, do not pay large sums of upfront cash to companies that promise to erase all blemishes on your credit report, give you a new Social Security Number or allow you to “piggyback” on someone else’s credit record. Check out the Better Business Bureau to ensure the company is legitimate before you do business with them. Consumer Credit Counseling Services is a national nonprofit organization that offers low-priced credit counseling to help you if you need it.

It is really nice to get a brand new credit card that has a high limit. At first you promise yourself that it is just for emergencies but before long you notice that you are using that credit card for day-to-day living expenses. To make matters worse, the problem usually does not stop with just one credit card. Slowly bad credit begins to accumulate and before long you find yourself in a world of trouble. There is not enough money to pay off the bills and interest keeps piling up. Stop living this way! There are ways to rid yourself of that baggage and find a better way to live.