Credit Repair Checklist
Credit Repair Checklist…Well Begun is Half Done
Credit Repair Checklist begins with a fearless and candid scrutiny of the information being reported by TransUnion, Experian and Equifax. These are the credit reporting agencies that supply the raw data that makes up your credit reports. Your credit scorer such as FICO uses this information to determine your credit score. Your basic FICO score (there are more than one) is determined within a range of 300-850. FICO SECRETS: Deep Dive All this is an attempt to determine how much of a risk you represent to a potential lender. How should a novice proceed?
Credit Repair Checklist…Step by Step
- Obtain and review credit reports to Start Your Credit Repair Checklist. You can use the free credit reports obtainable through the government mandated site Annualcreditreport.com Your Free Credit Report Many people find this site clunky. It is far from user friendly. It is unforgiving. If you make a mistake it will shut you out and make you do it in writing. Even if you manage to get all 3 reports here you may have some trouble keeping track of which reports have what. These reports can usually be refreshed only once a year but due to Covid you can refresh every week until further notice. Checking your own reports never has a negative effect on your score no matter how may times you do it.A second, better option is to take out the $1.00 trial offered by identityiq https://www.identityiq.com/creditpreferred.aspx?offercode=431146M9 You will receive a very user friendly format with the 3 agencies displayed side by side. This gives you valuable comparison helping to prevent errors that can creep in so easily. If you are serious you may want to carry this service for at least a few months at $21.99 per month.
- Examine the Reports for Errors. Is your personal information current? Are all the accounts and collections listed really yours? All communications with the credit reporting agency should be in writing. Don’t take their shortcuts. Object to anything that is just not true in writing and follow up in writing if you don’t hear back in 30 days.
- Improve Your Credit Position. Bring all current obligations up to date. Resolve to keep these obligations up to date. No more 30-60-90 day late payments. Even one recent 30 day late on any obligation is very harmful and long lasting. If you can’t learn to live by this rule your efforts are going to be largely wasted. We’ll worry about the collections and charge offs later because they have already done their damage. Make sure you have enough funds to keep laying down month after month of payment compliance first.
- Pay down credit and store cards. Pay more than the minimums. This debt to available credit ratio is second only to paying on time in credit scoring. The important thing for scoring is how much you owe relative to the limit the card carries. A $400.00 balance on a card with a $500.00 limit is a terrible 80% debt to available credit ratio. If the card had a $10,000.00 limit this same $400.00 balance would be only a very fine 4% debt to available credit ratio. This debt to available credit ratio is generally looked at in the aggregate. Add up the limits on all your cards, then add up all your balances. That is your overall debt to available credit ratio. Keep improving it as much as you can. This saves you on interest as well as increasing your score.
- Installment loans need not be paid down. Installment loans are loans with a fixed monthly payment amount for a fixed length of time such as a car loan or mortgage. The debt to available credit ratio is counted differently for installment loans. Make sure your payments on these are timely. If you don’t have an installment loan consider getting one to show you can handle this type of credit. Mix of credit types helps your score.
- Secured credit card may help. Many lenders offer secured credit cards. For as little as $200.00 you get a “credit card” that reports to all 3 credit reporting agencies. This is how someone with low or no credit can get back in the game. One of the best credit builder cards that accepts all applicants is https://www.creditbuildercard.com/onhomebuyingandcreditrepair.html Their site will explain more about why this is such a valuable tool on anyone’s credit repair checklist.
When Credit Repair Checklist is Finished
You can begin to settle collections and charge offs. You might consider professional help to settle these up. Credit repair professionals may be able to negotiate complete deletion for payment. Expungement of collections as opposed to just marking them paid is the holy grail of credit repair. Whether you go it alone or hire a professional the good start you had from following this credit repair checklist will bring you to a fine finish.