Bad Credit – Steps to Improve a Damaged Credit Score
There are a few steps you can take to improve a damaged credit score.
1. Pay your current bills on time – this is the most obvious step but it is never given a good explanation. The reason paying your current bills on time will help is because it will begin to create a trail of positive payment history with the bureaus. Your payment history is very important when your fico score is calculated. Additionally you delinquent debts will be aging and carry less weight when your score is determined.
2. Remove negative items from your report – you can dispute negative items on your credit report for free. It is your right according to the Fair Credit Reporting Act. You must write each bureau a dispute letter in which you include; the disputed item, reason, dates, and any other pertinent information.
Then your dispute will be investigated and if it is found to be inaccurate or cannot be verified by the lender then it must be removed from your report. This is one of the most effective way to improving your score.
3. Open new revolving lines of credit – if you can get approved for new credit you should take advantage because having another positive reporting item on your report will help to improve your score. It shows further financial responsibility.
4. Consolidate or settle outstanding debts – if you are being contacted by debt collectors you should take steps to consolidate or settle these accounts. However do not just pay these debts as that will do nothing to help your credit worthiness.
Instead you must negotiate payment; this is also helpful because you do not have to pay the full amount of the debt. Often a debt collector has added in fees, and interest rates and your debt may have been sold to a few collectors and ballooned to an unreasonable amount due to these fees.
You should start the negotiation by offering to pay 50% of the debt they are trying to collect. For example if your debt is a $1000, then you would offer to settle for $500. Additionally the collector must agree to stop reporting this debt to the bureaus. That way when you dispute this item on your report when they contact the collector to verify it the collector will not verify it as terms of your settlement agreement and the bureau must then remove it from your report.
Let us not forget to mention that another good idea is to first use debt validation with a collection agency before you begin negotiations with them. Debt validation places the burden of proof on the collectors to show that they own the debt they are contacting you about. If they can not prove this then, you do not have to pay the debt, and it will not be verified if you dispute it.
In sum, if you have a bad credit history there are many steps to improve it and without waiting 7 or 10 long years!
For a free credit consultation call 1-800-232-2903 or to learn more about bad credit repair visit us you can also learn about how to file a credit dispute and debt validation.