If inaccurate, unverifiable or obsolete items on your credit report are artificially lowering and your credit score, then you’re probably a candidate for credit repair. Before you go rolling up your sleeves trying to learn how to improve credit, it would be a good idea to familiarize yourself with the credit dispute process and the applicable laws. Otherwise you very possibly could end up doing much more harm than good to your credit report.
Here are 10 of the most common mistakes I see consumers make when trying to repair their own credit as well as some tips on how to avoid them. If your business credit is ruined, then we recommend to check visit https://businessdebts.org.uk/.
How to Improve Credit Fast
Mistake 1. Closing old accounts.
Your debt ratio makes up as much as 30% of your credit score. You can calculate your debt ratio by dividing your current credit card balances by the total amount of revolving credit you have available.
Let’s say for instance you three credit cards for the $3000 limit each and each card has a balance of $1000. That means your total available credit is $9000 and your total balance is $3000. That equates to a debt ratio of about 33%. The lower your debt ratio, the higher credit score. When you close an account, you remove that account’s available credit from the equation. That’s usually not a good thing especially if you still have a balance. If so, then balance is factored but the available credit is not.
So using that same example, if you close one of your accounts but still have $1000 balance left on it in your debt ratio would not be 50% because you have $6000 in available credit although you still maintain a $3000 credit balance. The result would be a drop in your credit score. Avoid lowering your credit score by keeping old accounts open. You should use your old cards once every 3 to 4 months to keep them active. Just be sure to pay off the balance 2 to 3 months.
Mistake 2. Using template dispute letters.
The credit bureaus aren’t stupid. They keep records of every dispute you make. In fact, they keep records of all the disputes everyone makes. They use a computer scanner with a program that uses optical recognition. The scanner basically takes a picture of your dispute and compares with thousands of other disputes in the database. When they see a dispute letter often enough, like the kind you find on the Internet that thousands of other people have used, their system flags it. Once your account has been flagged, it will be much more difficult to make any further progress in your credit report.
Don’t get me wrong, there are wonderful templates you can find online to give you an idea of what you need to say, like the ones you get with the Credit Solution Repair or Credit Repair Doctor (these programs show you how to improve credit fast). However, be sure to only use the templates to guide you in what to say and not use them as is. You need to put them into your own words before you actually mail it.
Mistake 3. Resetting the statue of limitations.
The statue of limitation is the period of time creditor can sue for a balance owed. The time varies state to state but the clock starts ticking either on the date of your last payment or whenever the creditor sends you their first letter. Making any payment towards that account after either of these events, even if it’s 20 years later, will close the statue limitations to reset and your debt to become legally collectible. Before you make any payments, be sure to research whether or not the debt is within the statue limitations.
Mistake 4. Not using certified mail.
Believe it or not, credit repair the legal process in any lawyer will tell you it’s not what you know, it’s what you can prove that counts. According to the Fair Credit Reporting Act, the credit bureaus, creditors and collection agencies have 30 days to investigate and response to your disputes. This is a major weapon in your arsenal because lenders maintain millions of records. It can be very difficult for them to produce the requested documents within that 30 day window. You can leverage their inability to respond to remove unverifiable items from your credit report, but only if you can document your request and the lack of response. This is why you need to certified mail.
Mistake 5. Not disputing the in the proper order.
When disputing, you’re requesting that the bureaus and your creditors prove that they’re following letter to the law. If their not complying with state and federal laws then your ultimate recourse is a lawsuit. However, your case wont hold water if you don’t follow proper procedures. If you are going to ask for leniency from a creditor, do that before disputing with the credit bureaus. If you plan to fight the remark on your credit report, you have to dispute with the bureaus before you dispute with creditor. This is key in knowing how to improve credit. No one has ever won a lawsuit against a creditor without having first disputed the credit bureaus. You must always use the proper sequence.
Mistake 6. Giving up too soon
While you may get a immediate results of your evidence of wrong doing, you can still get good results even without evidence of your persistent enough. For instance, most collection agencies will reply to a request for validation with a template response letter. This letter violates the Fair Debt Collection Practices Act. By following up, you can leverage their violation into the deletion or lawsuit.
Mistake 7. Not validating with a creditor or collection agency before making a payment.
Many consumers are too quick to pay off creditors and collection agencies just to stop the harassing phone calls or in effort to clean up their credit history a little bit faster. This not how to improve credit fast. Before making any past due payment, you have the right to request validation of that the debt is yours. You’d be surprised how often they fell to comply.
Mistake 8. Not keeping copies of all correspondence
Every letter you send and receive from a creditor or collection agency can be used to build your case. Never negotiate or accept offers unless they are in writing. You have to document everything. As I said before, It’s not what you know, it’s what you can prove.
Mistake 9. Validating Negative Information.
Another common rookie mistake is to validate negative information while you are trying to dispute information being reported. The rule of thumb is the less you say, the better. Make them prove themselves to you. The law is on your side. The burden of proof falls on the credit bureaus and the creditors, not you.
Mistake 10. Not Getting a Bit of Help.
I know credit repair may seem simple, but as you can plainly see, it’s not always. To get fast results far above anything you can do on your own without years of experience, trial and error, and maybe an ulcer or two, you’d do well to invest in a reputable professional credit repair software or system like Credit Solution Repair or Credit Repair Doctor. If you like to see a few reviews on the best ones to use, click here.
As always, I hope this helps! Learning how to improve credit can be overwhelming, but take a deep breath… you’ve just learned a few mistakes to avoid. You are on you’re way!
