What is the fastest way to repair bad credit?
The fastest way of repairing your credit score is;
1. Catch Up On Your Bills
If you have active accounts that are currently reporting as 30, 60, 90, etc… days late with past due balances – catch up on those active accounts and bring them current. No matter how much progress you’re making, your scores will not increase if you have creditors continuing to report new derogatory information in your credit reports month after month.
2. Pay Your Bills On Time
There’s no substitute for paying your bills on time. No matter how well you manage all of the other factors used to calculate your credit scores, your credit scores will remain low as long as you continue making late payments. Pay your bills on time and string together 6 months of perfect payment history with no late payments in order to see a significant increase in your credit scores.
3. Lower Your Credit Utilization
Your credit utilization is about 30% of your credit scores and maxing out your credit cards will hinder your improvement. Paying your credit cards down to a credit utilization of 20% or less will increase your scores very quickly. For example, if the credit limit on your credit card is $1,000 you will want to maintain a balance of no more than $200 on it, which is 20% of $1,000.
4. Establish Credit
If you don’t have any/enough active credit – establish some new credit by opening up a credit card. If you don’t qualify for a regular credit card, apply for a secured credit card.
5. Add an Authorized User Account
If you have a friend or relative who has credit cards with a long length of credit history, a low credit utilization, and a perfect payment history – ask them to add you as an authorized user to their account(s). Once added, the entire payment history from the time the account was opened will be added to your credit reports. This will help to increase your length of credit history, establish a positive revolving account with a good payment history, and may even decrease your overall credit utilization. Most importantly, it will help to increase your credit scores.
6. Limit Your Inquiries
Inquiries account for approximately 10% of your credit scores so don’t apply too often or you’ll be penalized. Limit yourself to one credit application every 6 months and if you already have way too many inquiries you will want to try to remove as many of them as possible. You can do this by contacting each creditor reporting an inquiry on your credit reports and ask them to verify their permissible purpose (authorization) for pulling your report. If they can verify this information the inquiry will continue to report but, if they can’t – the inquiry will be deleted and this will increase your credit scores.
7. Remove Derogatory Information
If you have accounts reporting derogatory information in your credit reports like late payments, charge-offs, collections, repossessions, foreclosures, etc… – you will want to work on removing it from your credit reports. Utilize the consumer protection statutes within the FDCPA, FCBA, and FCRA laws to remove as much of your past mistakes as possible. Disputing is a great start but, it’s only 10% of the actual credit repair process, so make sure that you also validate any debt reporting in your credit reports, initiate method of verification, goodwill requests, etc… and use the full scope of all of the laws at your disposal.
You can do all of this work yourself or hire a professional credit repair service like CreditFirm.net to file these investigations of your behalf.
Are you ready to get started on your journey toward better credit scores?