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Most credit repair scams and schemes and just a worthless waste of money and don’t help you to legally rebuild your credit.
Here is a simple process I have advised people to use for years that does the trick for rebuilding and restoring your credit from any credit disaster.
This isn’t some crafty or quasi-legal technique. This is just using the credit reporting system wisely and to your advantage to rebuild your credit in a relatively short period.
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Step 1 – Get a Copy of Your Consolidated Credit Report
Get a copy of your consolidated credit report. The type of report includes all the major three credit reports in one report. For example, I only use a consolidated credit report to check my credit, and the link will take you to the credit report I use.
Your credit report is like a report card of sorts. You need to look it over and ensure that all the accounts listed on your credit report are yours. If they were not, you need to write to the credit bureaus reporting them and tell them they are not yours and ask to have them removed. It’s like you looked at your school report card, and it listed classes you did not take. They should not be there.
If the rest of the accounts belonged to you, but you had a lousy track record with them, that information stays on the report just as if you got a D in a class you took. Just because you got a bad grade does not mean the class is removed from a report card.
After seven years, the bad credit items will no longer be reported on your credit report. However, when you look at your consolidated credit report, if any of them list negative information longer than the seven-year period, then when you write to the credit bureaus to point out any incorrect information, you can tell them about the old items.
Generally, the credit bureaus are good about automatically removing the old items.
While you are at it, look for any delinquent accounts that may be younger than seven years old. If you have any, pay them off. The contact information for the creditor will be on your credit report.
Step 2 – Boosting Your Credit Score With Good Credit Using a Secured Card
Using the report card analogy, if you wanted to bring up your GPA, you would need to earn better grades. It is the same with your credit report. If you want to bring your score up, you need to start having new and good credit reported about you.
The best way to do this is to get and use a secured credit card. Get two different ones.
The advantage of getting a secured card is that you will get the credit card and not get a rejection on your credit report that will further hurt your credit. Rejection can be easily spotted by looking at the inquiry section of your credit report and seeing there is no corresponding card opened. And with your current bad credit, you would get rejected if you applied for an unsecured card.
You will get the secured credit card on the first attempt because you need to put up a deposit with the bank that is equal to your credit limit. The deposit will earn you interest, and in the unfortunate event you were unable to pay your card and defaulted, the bank would use your deposit to pay the debt.
When looking for a secured card, you want one that will report to all three credit bureaus. This is key. We need your new good payment history reported.
When I say use the card, you do not need to balance from month to month. Just use the card for regular purchases and pay the card off immediately or at the end of the month.
It is also essential to make sure your secured cards have a line of credit above $1,000. A lower credit line card will count much less towards boosting your credit score. Increasing your line of credit may require you to put down an additional deposit.
Also, if you get a secured card with a $300 limit, never have more than 35% of the limit on the card. Even though your initial limits may be low, you don’t want to max them out. You can always increase your limits by increasing your deposits. You can increase your credit limit by increasing your deposit with the card company.
I suggest getting more than one card to get as much good juice flowing to your credit report without having too many credit cards open. Of course, you could go with three if you wanted to, but no more than that.
Just make sure the card will report to the credit bureaus.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
Step 3 – Enjoy Your New Legally Rebuilt Credit
If you follow these steps in a year, you’ll feel better about yourself and have substantially better credit.
Following these steps will take a year to get you up to the superb credit score you are looking for.
I would suggest you also keep tabs on your credit score using the free service from Credit Karma. It will let you know when your score rises along the way.
To keep your score growing, make all your future payments on time and avoid defaulting again.
Many people who have lived through a period of bad credit are often credit shy. For them, credit equals pain. So what they do is avoid getting any new credit. But this only prevents them from bringing up their grade point average.
This should do the trick for you.
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I file for chapter 13 on Dec 2013. A creditor that was added to my Chapter 13 bankruptcy has been reporting to the Credit Bureaus. What can I do to stop this?
Stop what?
I am 57 and have been on the same job 30 years and no promotion in 15 yrs. I spent a lot of time taking care of my parent, who has now passed, and caused a lot of medical bills for myself, late pmts and therefore filed chapter 13 and it just got discharged. I have never owned a home, and was just forced to buy another auto so I am hoping that this will bring a higher score to my credit after making ontime pmts. my score now is about 513 and I am single and no other source of income. I really need assistance to build my score to at least another 100 pts but don’t know how. I would appreciste your input.
Thank you.
Set up a selflender account. Get a secured card. Legally dispute all negatives on your report and look for a friend or family member that can make you an authorized user on one or two of their credit cards (as long as they pay their cards on time of course). Good luck and you can easily rebuild your credit. Peace and love.
What’s doing the trick for me is that I got a crappy job and I am paying my studenet loans, slowly but surely. Alawys fifty or more over, wahtever I can afford month to month. It hurts, and I’m going to be paying until 2024, or less time if I can keep at it. Babysitting jobs suck, but it is paying the bills. I also got a bank account and a credit card through a credit union, so am rebuilding my credit by using the card and keeping up on those payments as well.
I actually used Trinity Credit Services and had great results Steve. I’m sure there are bad apples out there, but I don’t regret the decision I made and my scores dramatically increased.
My husband and I have been trying to repair his credit after a repossession which resulted in a settlement. We have had a credit card for 8 months now and have never had a monthly balance on it. We usually just pay it using an app right after we use it. This seemed to have helped his credit by a few points, but the last time FICO reported he had lost 10 credit points! When I inquired as to why, it’s because our credit usage increased from 10% of the credit limit to 25%. Never a late or missed payment, and not anywhere near our credit limit and we lost 10 points. Can I fight this? How is that fair? We have been very diligent and careful with the card. 8 months, $6,000 and not a penny of interest. And we STILL lost 10 points! We feel so hopeless sometimes!
What other unresolved negative items are on the credit report and have you looked at a consolidated credit report or just a one bureau report?
I have pulled all three credit reports. Nothing unresolved. There were some late payments to credit card accounts but those were paid off in full, no settlements. Then of course the repossession was a settlement of less than what was owed. I have pulled all 3 reports and they are consistent with eachother.
How many open and unsecured lines of credit do you have reporting now and how old are those accounts?
I have talked to a few places to fix my credit. Some of them seem a bit inexperienced and some want me to do things that make me feel uncomfortable like pay a fee upfront, or do something fraudulent with my identity. Personally, I feel most confortable with a place like Lexington Law because they have a really good reputation and have actual lawyers working on their team.
Avoid CapitalOne, They place a hard inquiry on your credit for their Secure card. Just tried them, and lost 6 points over them
i would Recommend First Premier Card, They a bit pricy, but It’s super easy to get, and will boost your credit greatly. and the Deposit is only 33% of the Card limit.
Just watch out for charges.
Only using 35% of the limit on any given card is good advice which I have heard elsewhere in relation to taking the right steps to improving your credit score. It seems logical really.
I tried getting a secured credit card through Wells Fargo, and weeks later I got something in the mail saying that I’ve been rejected. I don’t really understand the process of getting a secured credit card. I thought that as long as you’re willing to put down a deposit, you’ll be able to obtain a card with whatever the deposit was. I was so confused and upset that I stopped trying to get one. 🙁
A bit perplexing indeed. Did the rejection letter state a reason why?
Very helpful and great suggest. You should write a series if you have not already.
Great pic!