Credit Repair: How I Increased My Score 200 Points
Credit repair is something many will have to go through at some point in their lifetime. Having personally gone through this, I have mastered the art and know with confidence this article will help boost your score. I know, you’ve heard this before from various websites offering advice on credit repair. Wouldn’t it be nice to hear from someone who actually went through the credit repair process? Do you want a perspective from someone who once had HORRIBLE credit and was/is now able to finance a newer model luxury vehicle with low interest rates? Would a 200 point credit score increase across all three major credit bureaus convince you to at least take a look at how I pulled this off? Here is graph to show just how much my score improved after taking a massive dive over a year ago:
Since this graph was generated, my credit score has improved to above 700 points. I now have a lot more financial freedom than what I dreamed was possible in such a short time. Amazing isn’t it? I raised my score more than 200 points in a years time! Now let’s talk about how I made this happen. I’ll list what actions I took in order from most impactful to least (although each part is important). Before we start, check your score to see where it is at. The best free site with no hidden cost would be Credit Sesame. Click Here for more info and to get started with them.
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Credit Repair – Dispute Inaccurate Information
Disputing inaccurate information on your credit report is the quickest way to boost your score. Lenders will report your payment history typically to all three credit Bureaus. This includes both the good and the bad. But what if I were to tell you that not everything reported is accurate? In my case, there were quite a few items on my credit report that even I had never heard of. Also some accounts had inaccurate payment history information. So I went to the website of each of the bureaus and dispute all of the information that was not accurate to my credit profile. This alone led to a credit score increase of just over 100 points as it eliminated a lot of the payment and collection activity I had listed on my report that were not applicable to me or had inaccuracies.
To start a dispute, go to the following links for each credit bureau:
I would not recommend disputing everything you see unless you know it is inaccurate. If the creditor cannot verify the debt, the credit bureau will remove it from your credit report. In my case, I had three inaccurate items on my credit report regarding missed payments. I dispute these items with all three of the major credit bureaus using their simple online dispute forms listed above. The result of the dispute was the credit item falling off of my credit report completely. This lead to a MASSIVE and permanent credit score increase.
Credit Repair – Resolve Collections
Collections can really hurt your credit score, especially if they are for a high dollar amount. I had quite a few through the years due to neglecting to check my credit and poor financial choices in college. This is not the end of the world; there are many ways to address collection accounts on your credit report. Here’s how I addressed mine.
Pay For Deletion
This would be the first option I would recommend after disputing the collection items that are inaccurate. If the collection item is valid and you know you’re liable for the full cost, simply reach out to the collection agency and ask for a “pay for delete” over the phone or through the mail. Be sure when doing this, you get the agreement in writing to avoid having the creditor/collection agency backtrack. If you would like a sample letter that you can use for this, click here.
Pay The Bill
I know, this is not what you came here to read, but this will look MUCH better on your credit report than having an open collection account with a high balance. This will show you are at least trying to fix your credit and set yourself up for a better financial future and better habits. Lenders will take note and this can be the difference between an approval or denial after a credit review.
Good Will Letter
Once the bill is paid, you can still reach out to the creditor through a goodwill letter. Basically, this is a letter explaining to the creditor what led up to the delinquent payment on the account that was sent to collections. Here you can explain your hardships or other major life events that contributed to you falling behind on the bill. Typically, creditors will show mercy if there is a valid enough reason for the credit accounts negative standing, and will remove the negative marks from your credit report. If you’re paying the bill, why not try this?
Credit Repair – Secured Credit Card
If you are unable to get approved for a traditional credit card or know your score is too low for a credit card approval, the next best thing is a secured credit card. You can easily get approved for a secured credit card loan with a small deposit. Depending on your credit score, you will either pay an amount equal to your credit line, or slightly below in some cases. In my situation, I cleared up enough items to only have to pay $50 for a $200 credit line. At the time, my score was in the VERY low 500 range (yes, I dipped deep into even the 400’s). Here are a few secured credit cards I would recommend:
Once again, you have to start somewhere. This will help build both your payment history and overall credit worthiness. If you maintain this card well, it will be a lot easier to get a traditional credit card down the line.
Credit Repair – On-Time Payments
Paying bills on time will help your score continually grow as your payment history score grows. For example, in the FICO formula your payment history makes up 35% of your credit score. That is a lot! making payments on time even for as little as a year can have a really big impact on your credit score. If you combine this with all of the tactics used to repair your credit, you will see a VERY big score increase literally within months of starting your credit repair endeavor.
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Follow these tactics and I know you will have a respectable credit score. You will finally feel financially enabled to apply for a loan or line of credit you’ve always wanted. Financial mistakes from the past become only lessons and no longer affect your life. Please do not abuse the system; try your best under any circumstance to pay your bills. But if you pay them and want to repair your credit, by all means try these tactics. You have nothing to lose! If you would like to learn more about how credit scores work, please visit my article discussing the FICO credit score. This article breaks down the components of your FICO credit score and explains it in depth. Having this information will help a lot during the credit repair process.
If you do not wish to repair your credit yourself, check out my review of our Top 3 Credit Repair companies. These companies have been reviewed by real people and feedback is based on actual customer experience (not just internet reviews). click HERE to see this article.