Most of us would prefer to never have to contend with the credit bureaus and credit repair. Of course there are some us that in the past have made poor purchase decisions, or been a little late on bill payments. Now we need to figure out hot to fix our credit. Of course the normal tasks of paying our bills on time and making all the minimum payment requirements on consumer credit cards will ensure our credit report doesn’t get worse, but there are a few things we can do to actually improve our credit.

Of course like most things in life we can’t know where we’re going without knowing where we currently stand. The first step to fixing your credit is getting a copy of your current credit report. You can request this for free from all or one of the three major credit bureaus (Experian, Equifax, and Transunion).

Once you have your report it’s time to start looking for errors. A large percentage of people have an error on their credit report unknown to them. It’s not until you review your report that you can spot errors. Items such as debts still showing that are since paid, items that aren’t yours, or items that show as late but the payments were made on time. All of these negative items have an affect on your credit score.

Of course you can challenge and get these items removed. This brings us to another important point. Always keep good records, hold onto receipts and statements of large bills you pay off, or make monthly payments on. You never know when you’ll need the documents as support. If you can provide backup paper work showing that you paid an item on time, or off entirely yet it’s still showing your credit report there’s a good chance you can have the item removed.

Of course this doesn’t happen instantaneously, but the credit bureaus are required to review claims within 30 days. After which you should receive a reply about the outcome of your complaint. If you begin to have trouble at this point, then it’s time you may want to consider a professional to represent you on your behalf.

Credit repair specialists, and attorneys are highly trained professionals in the field of credit repair. They earn their living be representing people like you and I and getting items removed from our credit reports. The benefit of hiring a professional is two fold. One they may see items you didn’t realize you could get removed, and two they usually only get paid if they are successful. Because of this pay structure it’s in their best interest to be successful for you.

While it’s always easier to have a professional represent you in a credit bureau situation remember the items mentioned above. There are simple steps you can follow to accomplish the same thing. If you aren’t trying to remove something technical, and the credit bureaus are responding to your claims there is no reason you can’t fix your own credit rating.

First you must validate all of your credit report. You must know what your good and bad aspects of your credit are and make sure they are accurate. You can dispute negative, or incorrect credit items on your credit report. You can get a free copy of your credit report, by law at annualcreditreport.com. The best place to get your credit score is myfico.com, because it is the score most lenders use. Knowing what you are up against in the fight to improve your credit score could be half the battle.

Second is not making copies of communication with the lenders or collection agency when going through the dispute process. The dispute process is a legal process, so having your paper trail is important. You can bet the creditors have their lawyers create a paper trail for the case against you. You don’t want to be the person who pays a debt and the creditor promises to remove it from your credit report, and 90 days later its still there and you cant find the letter. Even worse, to be the person who asks for their promise to remove it in writing, and pays the debt before you receive the letter. Create a paper trail, in the dispute process that’s the best ally.

Third is using a boilerplate template credit repair form. If you search online, you can find hundreds if not thousands of credit repair websites where you can download free templates they say will help you fix your credit. The problem with that is everyone is using the same letters, with the same wording, sometimes in the same template format. Credit bureaus have gotten wise to this and are using technology such as optical character recognition (OCR) where if the computer reads the same template it will kick it back and send you a letter saying its a frivolous or duplicate dispute, without it ever impacting your credit report. If you can handwrite your letter, or use a non standard font to write your dispute letter, hopefully, the computer can’t read it and it has to be read by a human, giving you a better chance of not being kicked back. Successful dispute letters improve your credit score, don’t risk yours not even being processed by the credit bureau.

Fourth is not using certified mail in your debt resolution process. Remember, you want a paper trail to prove each step you took in the dispute process. Remember this is a legal process, the creditors lawyers are using certified mail in the process of sending you letters. If you don’t use certified mail then you have no way of proving either in court, or with the credit bureau if you ever cent anything to the creditors or debt collectors. This also will prove when you sent the letters and if it was received by them. When you attempt to improve your credit you must have proof and be able to back it up, because the burden of proof is on them and you can assure they will have it, you can be sure of that.

Fifth is not knowing about statute of limitations on debt in your state and how they work. The statue of limitations, which is the law for the amount of time a debt can be collected, is different in every state. Even though it varies from state to state, for the most part the law states that the period where it it applies is from the first collection letter from the original lender, or the date of the last payment is made. This means that an original creditors request for payment starts the process, but if a collection agency gets you to make a small payment, it will renew the process from that date forward. Many times, the agencies will try to put the heat on your just before the statute date is up, just so they can renew the process. Know the laws regarding debt, you can find each law by state at creditcards.com

These are steps to help you get started to improve your credit in the dispute process. The process is a journey but if you limit your missteps it can be a shorter, more successful journey.

Are you getting harassing phone calls from bill collectors telling you that you’ll be ruined financially if you let a credit card charge off happen? If you’re constantly behind the eight-ball with your debt problems and are late with most debt payments, chances are you’ve heard the dreaded phrase “charge-off” from bill collectors. But, do you really know what a “charge-off” is? What will happen to you if you let a charge-off go? And, what’s the worst that can possibly happen to you, once a charge-off occurs?

What Is? A Charge-Off?

Basically, a charge-off is when a creditor (bank, credit card company or other lending institution) writes off the balance of the loan as a “bad debt.” Banks and other lending institutions count your debt owed to them as an “asset” on their books. After about six months of non-payment, the lender can no longer call this debt an asset. Of course, you still owe the money and they’ll still try to collect it from you, and they will give you a “ding” on your credit report – definitely not a great thing, but not the end of the world, either.

A charge-off is not a cancellation of the account by the creditor. Your ability to charge on the account will be revoked about two months before the charge-off. You still owe the debt.

How Serious Is A Charge-Off?

Don’t panic when confronted with the possibility of a charge-off – it isn’t the end of the world! A charge-off is a serious situation, and can result in a big, bad mark on your credit report, and a lowered credit rating. You will still owe the debt, and bill collectors will do their best to collect. Always avoid the charge-off if at all possible, but don’t commit payments to a high-pressure bill collector that you can’t realistically make. Before you start paying down these bills, make sure you keep your household running by keeping current on food, utilities, insurance and medical expenses.

Professional bill collectors are notorious for applying huge amounts of pressure to force people to pay past due bills (that’s how they make a living) that they really cannot afford. Sometimes these bill collectors want post-dated checks (checks written with a date in the future when, hopefully, there will be money in the account), and quite often these checks end up bouncing – compounding the problem.

Here are a few tips to help when a charge-off happens to you.

Stay? In Touch

Stay in touch with your lender and determine what the minimum amount is that you can pay now to avoid charge-off. Frankly, this is one of the biggest mistakes people in debt make – they don’t talk to their creditors. Record the date of the call, and who you talked to. Get any agreements on paper – have the lender fax to you any new agreements. Don’t be pressured – only make commitments that you can follow through with.

Negotiate, Negotiate, Negotiate

Try to negotiate a lump-sum payment. Some lenders will be glad to get the debt off their books and may take 50% (or less) of the total debt. If you do make a deal this way, make sure you get it in writing and follow through! If you fail to make good on the deal, the lender will not be as forgiving in the future.

Even if your debt has been assigned to a bill collector, still try to work with the original lender – depending upon their relationship, you may still be able to cut a better deal with the lender. Once again, follow through is very important – if you make a promise, keep it!

Never Send A Post-Dated Check

Never send a post-dated check. If you’re sending post dated checks, then you probably don’t have the money in the account today – you’re just hoping you will have money in there later! This is a recipe for disaster, as many who receive post-dated checks will attempt to cash them immediately – either taking money you had planned for something else, or bouncing the check, as there was no money in the account.

Also, never, ever give a bank account number to a creditor or bill collector – under any circumstances. This can be a fatal mistake – even worse for you than the charge-off.

Get It In Writing

This is one of the most common mistakes when dealing with bill collectors – the debtor (that’s you) fails to get the new deal in writing. The verbal is worth the paper it’s written on – in other words zero! With this type of arrangement, you will have no recourse at a later date. So, get everything in writing – always!

While a charge-off is definitely something you want to avoid, it surely isn’t the end of the world. Remember to keep a cool head, don’t make any commitments under pressure that you cannot keep, and get everything in writing.

Parting Thoughts

Panic makes every situation worse, and that certainly applies to charge-offs. Most lenders don’t want to do a charge-off, so remember that they are likely to at least talk with you about possible solutions – meaning? possibly a reduction in balances for a lump-sum payment.

Keep a dialog going with your creditors. Even if you can’t come to an immediate agreement with the lender, always keep the door open for further discussions. Not talking can lead to a worse deal for you.

Honesty is always the best policy. Only make commitments that you can fulfill. Follow through fully on any deals you make. And, keep good records of all agreements and transactions.

Learn the lesson. Always live beneath your means – spend less than you make. Don’t support a lifestyle that you can’t afford with credit, and your life will be financially stress-free. And, a debt-free life is a great thing.?

A, B, C, D, or F? What’s your grade? Similarly, just like in school, you are being graded on your credit performance. However, unlike schools you are not told what you are being graded on. The Fico score is your credit report card. The first thing that needs to be done before you can begin to improve your credit grade is to find out what grade you are starting with.

When it comes to your credit report card, there are six things that you must choose to do on a regular basis, that is, check it, compare it, track it, build it, protect it and repair it.

Check It – Know your FICO score and the factors affecting it. Your FICO scores are the credit scores most lenders use to determine your credit risk. You have multiple FICO scores, one from each credit bureau (Experian, Equifax, and TransUnion). It is crucial to note that each bureau may have different information.

Compare It – Monitor your credit report at least four times a year. The worse time to discover a problem with your credit report is when you go to obtain credit for that new car, mortgage, or vacation. Also, trends can also help identity spending patterns, both good and bad.

Track It – Tracking is an essential component to maintain and achieve a good credit score. You can set up alerts to receive changes to your report automatically. There are three main credit bureaus that manage credit records, Experian, Equifax and TransUnion.

Build It – Establishing a satisfactory credit history has never been as important as it is today. Two most influential factors in your scores are, whether you pay your bills on time and how much of your available credit you actually use. Don’t charge more than 30% of the card’s limit. Don’t charge more than you can pay off in a month.

Protect It- Make sure you pay the bill, and all your other bills, on time. Also, you can use a credit monitoring service that will give you with quarterly updates.

Repair It – How Will a Letter Help Me Fix my Credit?

According to The Fair Reporting Credit Act if an account is not being reported 100% accurately, by law the bureau must delete it from your file, within 30 days of your dispute. The majority of negative information is deleted using the dispute method. Here is how the process works.

If the bureaus cannot verify the accuracy of any account you dispute, they MUST remove the account within 30 days of receiving your dispute. It’s the law.

The first (and most crucial step) is to order a copy of your credit reports from http://www.myfico.com and reviewed them for errors and negative information that has caused your credit scores to drop. Disputing negative information on your credit report is the most effective method to increase your FICO Score.

Afterwards, make a list of disputed accounts so they are separated from your good accounts. Make sure that you arrange these accounts so that the oldest record is listed first and the newest is listed last.

Then, when you find errors or out dated information on your report, you want to write a hand written credit dispute letter for the first two accounts to each credit bureau that is reporting negative information on this account. This is necessary because there are three bureaus and they all report differently. So, you want to make sure that you are not sending a dispute letter to a bureau that is not reporting negatively about you! If you are confused by this, 30 Days to a Better Credit Report covers this process and other techniques quite well, so having a copy will help you tremendously.

When it comes to building credit, build is the word of focus. In my mind, there are two types of credit scores, each with its own separate techniques for improving your credit. No matter where you may fall, I hope you take something from this article.

Everyone knows it takes credit to build credit. This can be very frustrating for those with no credit because it severely limits the available techniques you can undertake to build credit. For those that are just starting out, there are several available options. The easiest way to start your own credit is to piggy back from someone else’s good credit. This can be as easy as being added to a credit card as an authorized or joint user, or by getting someone you know to cosign a loan for you. If these options are not possible, the next best solution is to apply for a secure credit card. These credit cards allow you to put a deposit down which is usually the limit you are allowed to spend. This takes any risk away from the lender and can help just as much as having a traditional credit card. In addition, most secure credit card companies will let you switch to a traditional credit card after a year or so if you make your payments on time. Above all, make sure you choose a company that reports to all three major credit companies and watch for fine print.

Some people already have credit but want to know what they need to do to improve their credit score. To these people I ask how much of your available credit do you actually use? To maintain the best score possible, you need to show these credit companies you are sitting comfortable. Try to keep under 30% of the credit you have at your disposal. Also make sure your credit comes from several various sources. This will show you are not only stable but established.

Checking your credit report is a very good idea, and depending on what site you use, it can be free. This is important not only for satisfying your curiosity, but also for guarding against identity theft. Before you go to get that new house, car, or job, make sure to request a free copy of your credit report. The last thing you need is false information making a bad first impression.

This is a true story. Recently, Chase cut my wife’s credit limit from $18,000 to $1350 or $23 greater than her existing balance of $1327. Initially we thought this was because of a “missed” payment but still, it seemed like an excessive penalty.

We do all our banking through Bank of America’s Online Banking program. The “missed” payment was the result of the payment being sent by the bank to the wrong billing address. After a number of calls to B of A’s customer service, the bank agreed it was their error, reimbursed us the late fee Chase charged, and issued a good will letter to Chase. Unfortunately this had no impact on Chase.

Chase as you may know, recently bought up Wa Mu who had previously bought out Providian. My wife’s original card was a Providian card which she opened six years ago. In those six years she has never missed a payment. Guess what. The first line Chase customer service person didn’t know that. All that was in her computer was the brief history from the time Wa Mu purchased Providian to the time Chase acquired Wa Mu. In other words they were ignoring roughly five years of her credit history.

My wife can be pretty persistent on the phone and she finally got a supervisor on the line. After several minutes the supervisor miraculously came up with the entire history to include the letter from Bank of America. The supervisor agreed that a payment had not been missed and that information would be relayed to the credit reporting agencies.

When asked about the credit reduction, the supervisor said there was nothing she could do and to call the Lending Department.

After being switched around from a number of agents, none of whom had ever heard of the “Lending Department”, my wife finally reached a person who had the authority to change credit limits. When that person viewed the history, and the other cards in the credit report, she agreed to increase the limit back to the original $18,000. She also told my wife that she was lucky that the original customer service supervisor had taken the time to update the file to include the Providian history.

So there is the secret. If you received notice from Chase that they are cutting your credit limit, and you originally had a Providian card, chances are the decision to cut your line was made without considering your history with Providian. If that history was good, it is worth your time (a lot of it on hold) to call Chase and get them to include that history and reconsider the credit limit.

FICO credit scores are calculated from several angles of difference in your credit data. Your financial activities are represented by a numerical figure between 300 and 850, with 300 being the worst and 850 being the best. Your FICO score is used by all financial institutions to gauge whether or not you are qualified for a loan and/or other credit related services.

You must understand that how your FICO score affects your financial opportunities to a certain degree and, as a result, your lifestyle. Your FICO score is based on your credit report. A credit report is a complete history of all previous financial activities, back tracking from the day you started using up your credit cards, utility bills, previous and existing mortgages, and your payment history all throughout. A good credit history will result in a higher FICO credit score in your records. Financial institutions and other lenders use this score to come up with your potential of committing future payments on time and elaborates more of your character whether you are a credit risk or not.

FICO scores range between 300 and 850, and can be grouped as such:

650 to 850 = Good Credit

550 to 650 = Average Credit

300 to 550 = Low Credit

You must understand that your FICO score may very well change everything in your financial plans as it is also a very important number to all lenders about your reputation. This dictates them whether or not to grant you a loan, how much money they will lend you and how far they can extend their service. In the financial industry, this tells them about you, your past, present and future. If you score high in your FICO the more probability that you get to choose the kind of terms and service you want for yourself. This also includes lowering your interest rates as well. If you let your FICO fall then you will have a hard time recovering from your financial status and more frustration it entails by not taking care of your finances well. It could take years before you can recover so as early as possible be responsible on your spending and aim to have a high financial reputation.