MONEY AND FINANCE

Improving Your Credit Score Today

Improving Your Credit Score Today

You can repair your own credit if you are willing to devote the time. On the other hand, if you have more money than time, you may wish to use a professional credit repair company. So you can decide which way you want to leap, here are the basic steps to follow for an effective do-it-yourself credit repair campaign:

• Get a copy of your credit report from all 3 major credit bureaus (Experian, Equifax, and Trans Union). You can get your reports for free by going to www.annualcreditreport.com
• On the back of each report, you’ll find an explanation of the codes used in the file. Study these codes so you’ll know which accounts you need to concentrate on most while you’re performing each step of the credit repair process.

It is commonly agreed the first items to repair are called “charge-offs”. Charge-off means the creditor has given up on trying to collect the debt owed and have written it off as a loss. If you do not attack the charge-offs you eliminate any chance of effectively repairing your credit.

You will then have to contact each creditor that has charged off a loan. You will ask for what is called re-instatement. When you talk to them you will need to explain what happened to cause you to default. You will also have to tell them the problem has been fixed and you are ready to start paying on the balance due again.

Unless you speak to a complete dolt, they will understand you are trying to repair your credit and more than likely will go along with you. This benefits both you and the company.

If they agree to re-open the account, they will report it as current to the credit bureaus after they receive the first agreed upon payment. If all of your charged-off accounts are eventually re-instated and reported as current, your credit repair campaign will be doing very well.

There is a good chance you may not be able to get all of your charge-offs re-instated. If this happens to you, contact these creditors again and request a “settlement amount”.

Bottom line to settling in this manner is you will probably have to pay 50% of the amount due as a settlement. Ask that upon receipt of payment, the account status be changed to “closed.” Get this agreement in writing before sending your payment.

Remember removing charge-off items are essential to a successful credit repair campaign. Success means a good to excellent credit score.

Next, search for late payment entries. These are usually pretty easy to clear up. Just contact the creditors and explain why you had difficulty making your payments on time. Tell them the problem is fixed and you’ll make your payments on time from now on. Make sure you make them on time or all of your hard work will have been for nothing.

Ask the creditors to remove the late payment entries after you have made timely payments for a period of time, say 90 days. Most will. Again, most people understand many of us have financial difficulties from time to time and they’ll cooperate and help you repair your credit.

Judgments will need to be removed next. In some states, you can petition the court of jurisdiction to remove the judgment. If your stated case is strong enough, the judge will grant your request.

On the other hand, not all of us are that lucky. The unlucky ones will have to pay off these loans in full in order to get the judgment removed. If you are in that boat, contact the lender and make arrangements to pay off the amount due with an agreement (in writing) that the judgment will be removed and the account reported as closed after full payment is made.

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