A Simple Guide to Credit Repair

O.k. first and foremost I want it known that I do not claim to be anything but a research freak. I am not an expert in matters of credit at all. I have been beating the bushes to learn all that I can about this subject. I have a few suggestions/Ideas for you to CONSIDER.

I feel like I should make it clear that these are only ideas and suggestions with a little info added. Use these suggestions Only after you do some research of your own.

Knowledge really is power and power becomes leverage. Archimides said about Leverage "If you give me a lever long enough I can move the world."

The First thing I learned in my research is that paying off past due debts, does NOT significantally help your credit rating. Most times paying off old debts does nothing to help your credit rating at all. It just shows up as charged off and that doesnt help at all.

The most important thing that you can do starting today Is to create a budget for yourself that allows you to pay all your bills on time from this day forward. This is the single most important thing that you MUST do to help your credit. If doing without some of the amenities in life for a while is necessary then SO BE IT.

Next you must find a way to establish some form of credit for yourself. I knew going into the methods I used that I would suffer because of my poor credit score. Interest rates were going to be very high. KNOW this going in. It is something that you have no control over (yet) . Until you get some leverage that is.
Now here's what I been up to.

First I got a free copy of my credit report from one of the many free credit report services on the web. Just google free credit report. You will be given access for a limited amount of time before they charge you their monthly fee. Cancel the service Immediately after recieving the free copy. If you dont they will bill your bank account or credit card / dedit card for their monthly access fees. You can ontain a free copy of your report from the credit bureau's themselves also. You are entitled to one free copy from all three of the burea's every year. If you have been turned down for credit in the last 60 days you are also entitiled to a free copy. You can obtain the copies by contacting the Credit Bureau's at the following addresses or websites;

www.annualcreditreport.com Provides you direct links to all three of the bureau's. It is a completely free service.

www.equifax.com Is the website for Equfiax.

www.transunion.com is the website for Transunion

www.Experian.com is the website for Experian.

Each of these websites have contact information listed for writing to them to recieve your credit report.

Now that you have your credit report,review it carefully for innaccuracies. If there are errors dispute them immediately. The dispute forms necessary can be obtained at the above websites.

I am not sure of this process personally because I haven't had to do it but I read about it and its pretty straight forward. Credit agencies are required by federal law to investigate ALL disputed items no matter what. Then they use these findings to either show proof of the debt to the person or remove/ modify the account to the reflect the accurate information.

(NOTE) I have never ever had a credit card so I have very little knowledge of credit card debt rules etc.

Once done with that.... Hey you now have a little leverage. You know what "THEY" know when they check your report.

Credit Repair Agencies Ripping Off Americans

DO NOT use any so called credit repair agency. They are all bogus according to my research. ** see www.ripoffreport.com **

They are also regulated by the Credit Repair Organizations Act. One of the many rules that govern these agancies is that in no way are they allowed to collect ANY money before actually repairing your credit. Here is the rule verbatum take from the website:

(b) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

This Law and all others concerning these Credit Repair agencies can be found Here:

http://www.ftc.gov/os/statutes/croa/croa.htm .
From what I have learned, this is what the so called Credit Repair organizations do. They gain access to your credit report, then they dispute every single Item on the report that is negative. That's it. You can do the exact thing yourself for the cost of some stamps, to mail the dispute letters.

Credit agencies do no like this. They can't do anything about it because, again, by law they have to investigate. If like me everything on your credit report is accurate, then that is the end of it for you. $300.00 or more gone for something you can do from your computer or kitchen table for free.

I would suggest that this is not a good plan of action though, the whole blanket dispute thing. SOmetimes disputing items can come back to haunt you as they may be reported again an dupdated, therby making it another 7 years before they are removed.
Remember We want to gain leverage not lose it, with these people.

Budget Budget Budget...

Gaining Leverage with New Credit

I went to a local car dealership that I had a prior relatonship with, I had previously purchased a truck on a buy here pay here. Knowing it would be bad as far as interest rates were concerned, I got financed for a very nice van. Now I got the van financed for me at a really high rate but I was prepared for that and I got the payment that I needed, to be able to ALWAYS pay on time. You need to get this done through a Finance Company not a buy here pay here deal. Most Buy Here Pay Here, companies do not like reporting to the credit reporting agencies for some reason. Generally they do work with non traditional lenders to finance their cars.

Look around for small car lots that offer financing from an outside lender, as well as in house financing. Big dealerships like to use banks. Banks are not really flexible and you could easily be turned down for the loan. THIS WILL HURT YOUR CREDIT!!!
Smaller financing companies are willing to take risks to get some money. Commonly they use their own money to finance with so banks dont need to be involved. Now here's the key to this being a huge positive to your credit.

First, You must Budget for this purchase. Know going in what you can afford and do not deviate from it. No matter what you do, do not spend what you cannot afford. Remember als that with the vehicle, comes a new full coverage Insurance policy that will also need to be figured into your budget, Maintence is also something to consider.

You will need to ask the finance company if they report to the credit bureau's if they do not or are not willing to, then just move on. Don't give them your business. We are trying to fix our credit here folks not just get Stuck with huge finance charges for no personal gain.

When the account posted to my report 3 weeks later I gained almost 50+ points with the bureau they reported to. In a week I went from 523to 570+.
They only reported to one agency at first. I contacted them and asked them to please report it to the other two. They have to pay a fee for this which I gladly paid for them on the spot, 4 days later I gained 41 points with transworld and 46 points with experian bringing them to 581 and 589 respectively. Not a bad Deal Right?
I got a nice van that I did need, and helped my credit report at the same time. Of course the interest rate is totally rediculous but I am cool with that for now. 12 months of on time payments I'll refinance the loan at a better rate using my much better credit rating and good payment history and it'll drop dramatically.

A Plan of action..

1) Set up a savings account at the bank ( if possible) if not the cookie jar fund. Whatever you need to do.

2) Put the van payments into the account / jar before the payment is due.

3)The insurance bill also .

4)Under no circumstances barring a really, really huge emergenciy is this money to be touched EVER. It is for the van payment only. No matter what.

5) I also have a little back up plan because I went to My Mother in Law, with my pride on my sleeve and asked a favor of her. Should anything ever come up and I for some reason could not make the van payment ON TIME, Would she consider making it for me so that I do not hurt myself. I even offered to make a contract to give her piece of mind. She gladly agreed to back the account. Someone you know is probably financially secure enough to help you do the same thing. Swallow your pride and explain what you are trying to do. If they know the reason is real, and that it will help you and your family they will be willing to help you. Use this as a last Resort though. I hope to never have to call on her but its nice to know I can if NEEDED.

6)Check your credit report often using the many free online credit report people. It is imparative that you cancel your membership Before your free trail date ends. I cancel it the day after I get the report. Watch what a difference a loan of $5000.00's just being added to your report can do for you. Imagine what its gonna be like when you make your payment ON TIME for 6 to 12 months. Yep it works. I was surprised at the change.

As previously stated, the only true way that I have found to dramatically increase your credit rating, other than Time and More time, is to establish some form of positive credit account with someone.

I research diligantly. I have been all over the internet learning about how your credit works, what effects your credit, etc etc. I also ask questions on other forums regarding this stuff.

Jewelry Buying For Credit

I asked a question at yahoo.answers, regarding secured credit cards and their potential benefits/risks. I was given a link to a site. Crown Jewelers Online.

With absolutely NO credit check, thats right I said NO credit checks at all, this online company is willing to give you line of credit up to $2500.00. Skeptical?? Yeah I was too. So I went to the site and tore it apart. bit by bit. I researched all the best rip off related websites etc. Guess what? It is exactly what it claims to be.
I found NO bad reports for this site, and I looked hard too. I read the entire terms and user agreement at their website. I Checked them out very very thouroughly. They are absolutely legit.

They offer some really important things here at this website.
The most important by far is their willingness to help anyone repair their credit report. They report monthly to ALL 3 Major credit Bureau's. Yeah that's right Monthly. They do require your social security number, how else could they report? They DID NOT check my credit report I checked it and they did NOT make an inquiry. Imagine that, they ain't lying about that at all. HMMM. I have continued to check my report (free) and they stiill have NOT checked it. It's been 2 weeks now.
The Application took about 15 minutes to fill out. The most important factors regarding their decision were my telephone numbers. Home, Work, Cel etc. I have a little problem here. I am self employed and My home phone number is also my business number. The big snag right? NOPE. I submitted my cel as the home number. My wifes cel as the cel number and My home phone as my work number. DONE.

Wanna hear something really cool? When they call my work for verification I'll be the one verifying MY work history. Nice right. I told the truth about my income, I didn't want to go into this with false info. The Phone thing I didn't cosider as false info as I couldn't use the home and work numbers twice. I tried, it kept giving me an error to change the number.

I waited for them to call. They did. What did they ask? Nothing.

It was a call that said in a taped voice. " this call was made to verify an active number. " That's all. All three phones got the call at almost the same time. They also asked for a number for the closest relative not living with you. I gave my brothers. He got the same call.

3 hours later I had an email stating that I had been given a credit limit of $1500.00 . WOW!!

They have some rules though of course. At first they require you to pay a deposit on anything you buy. It depends on what you buy as to what the down payment is. It is all covered in their terms and policies etc. I did some math and the deposits range from about 25% to 50%. Yeah, I know its a lot but remember what we are doing here. We don't really need this jewelry do we? Naah, however we do eed to establish positvie credit somehow, somewhere.

If you do order something (I did order a necklace) you start making your payments, after a while of payments being on time you are guarenteed, Yes guarenteed via their contract with you, to have the deposit requirement removed from your account. Now you have a non-secured credit account. Not Bad huh?

The jewelry is nice. It's a little pricey of course and the interest rate sucks at first but it does come down if you make your payments on time. The coolest thing is that I bought a really nice necklace for $400.00 with a deposit of around $130.00. When it hit's my credit report it will list as a 1500.00 credit limit with a balance of 270.00 , and show me as paying on time

Remember they report all activity monthly. So ontime payments post every month. I don't know what my score will jump to now but it Will GO UP. I will pay the necklace off slowly and I don't need any more jewelry so I don't anticipate using it after I pay it down and finally off. I will however keep the account open for a while after because it can only help my score having an open credit line that has no balance. I may even keep a small balance for the duration of my account.
Pay the interst and be done with it when I get to 700.
I expect to be close by the end of this year.

Now here's the part thats real important again. The minimum payment is something that you should Budget for. Again with all the great things this will do for you if you pay ontime, Paying late or not paying is going to really hurt you. In my case I can afford the payments on my budget. If you are not sure if you can, then do the math, after the math if you still aren't sure then DO NOT DO THIS.

Leverage works for you and against you. You must be diligent in gaining your leverage on your credit not losing it.

Securing a Credit Card

I then applied for a secured credit card through Orchard Bank. filled out their Aapplication and made a 200 dollar deposit into their bank. I just recieved the card. Their was a $35.00 charge on it for the annual fee. Not too bad compared to most credit card companies that charge annual fee's. The interest rate is also comparable to other cards rates. Actually it is a little cheaper then some of the big name companys.

I am going to be very careful and use this only until I am just under $100.00's spent. Then I will just pay the minimum balance every month plus 20% until it's paid down. after that I will use it the same way one more time then I will cancel the card and get my security deposit back. Depending on the interest rates they are willing to give me after I have had a positive relationship with them I MAY get an unsuecured card for $500.00 and keep it open for maintaining my good credit. By then I will have been given a credit increase with Crown Jeweler's and it will be a no deposit account. Made payments on the Van and gotten it down under 3k. I should be up over 700 on my credit rating by then and getting a loan for a mortgage will be a breeze then.

Heres the link to get to the Jewelry / Credit repair store. http://www.crownjewelers.com/Default.asp

Oh and I don't know if it will benefit me in anyway. but when I signed up there was a who referred you to the site thing. If you do sign up maybe you could let them know I hooked you up with them.

Who know's maybe I'll get some kinda discount or something. This of course is something that is totally up to you guy's. Just want you to know that other than being an account holder with them I do not have any other affiliation with the site.

Folks read everything for youreselves learn everything you can . I did. Don't take my word or (anybody elses for that matter) for it ,research it yourself. Remeber Knowledge is Power, Power is Leverage and leverage can move the world...

BUDGET BUDGET BUDGET

Hope this helps.
Rodney E. Reed