Credit repair is a scam

Talkin go money

Step 2 - Pay your bills on time

Since 35% of your credit score is based on your bill-paying history, paying bills on time each month is the most important thing you can do to fix your credit score. Two great strategies to improve your payment history:

  • Set up automatic payments using your bank's online billing system or your payee's automatic payment system. The danger of this strategy is not enough money in your bank account to cover the automatic payment. So make sure you always have a cushion in your account to cover these automatic payments.
  • If you prefer more control, set up a place in your home where you always pay bills, make sure all bills arrive where they arrive in the mail (or print out an email Invoice when you receive your invoices). Get an accordion file to add the bills to the file based on the day you have to pay them. Be sure to pay the bills so that the check or electronic payment reaches creditors on time.

If you're unable to pay all of your bills on time, "buffer the blow to your credit score by using just one account. There's a component to the FICO score called" prevalence, "" says John Ulzheimer, Credit Expert and President of the Ulzheimer Group. “That means five collections are worse than one.” He recommends that the highest monthly payment fall back to free more money each month to meet your other debt obligations. "

"If you have to choose between debt, skip the credit card bill because it is unsecured and there is nothing a creditor can take back. Fortunately, credit card shortfalls did less harm to credit metrics than larger debts like home or car loans," said Sarah Davies, senior vice president of analytics. Product management and research for VantageScore Solutions.

Step 3 - Get Your Credit Reports

Now that you are paying your creditors on time, the next step is to get a copy of your credit reports; you can get it for free once a year in the annual credit report. You need to apply for a free report. from each of it's cred reporting agencies - Equifax, Experian, and Trans Union. Don't sign up for a credit monitoring service, just get your free copy of each report. When you get to the website, click the red button with the message, “Get your free credit reports.” You can only apply for one company at a time, so you will have to go back to that website 3 times. The most effective way to do this is to ask for a report every four months - then you have the year covered.

Step 4 - Correct any errors

Read each report carefully. If you find mistakes, correct them individually with each credit bureau. Generally, you are considered guilty until proven innocent. When writing to the credit reporting agency, be sure to send copies (not the originals) of any evidence you may have that there is an error in your credit report.

For more information about correcting your credit information, see “Loan Repair: How To Help Yourself” on the FTC website and under Troubleshooting Your Credit Report. Agencies must investigate all questions within 30 days.

Step 5 - reduce credit card usage

After late billing, the next biggest impact on your credit score is how you use your credit cards, which is 30% of the score. Ideal usage is considered between 10% and 20% of your available credit limits. For example, if you have $ 10,000 in available credit lines, then the ideal balances would be between 10% ($ 1,000) and 20% ($ 2,000). People with balances in this area tend to be offered the best interest rates.

You need to show that you are good at handling credit, so putting the occasional balance on your credit cards can be a good thing. Someone who never uses credit is unlikely to have as good a credit score as someone who shows he or she can use it well.

Step 6 - Monitor Your Progress

You can see how well your credit repair is working by monitoring your credit score. There are numerous ways you can do this for free, in addition to your free reports. Many credit cards offer you a free monthly credit score as part of their services. If you haven't already signed up for a free score, check with your credit card companies or banks to see if any of them have a free service.

Join a free credit monitoring website. Make sure there are no hidden monthly fees. Some commodities contain credit karma and credit. Com. Credit Karma even offers a free credit score simulator that gives you the ability to determine the likely impact of a credit decision before taking on that new loan.

The bottom line

Legitimate credit repair is not a quick fix. It takes time and perseverance. Don't get caught up in a credit repair scam. There are no legal ways to fix your credit score quickly. See Spotting Credit-Repair Scams and Extreme Credit Repair: Why It Doesn't Work.

The best strategy is to pay all bills on time. Do not apply for new credits unless you really have to. Too often people sign up for a new credit card for a one-time discount. You could pay for this discount for years with a lower credit score and higher interest rates.