How to Repair Bad Credit

If you are anything like I am, you have at some point found yourself in the bottomless pit called debt. I recently heard about a law being passed that requires a co-signer for anyone under the age of I think 21. Now that sounds like an idea to me! Anyways shortly after my 18th birthday I did what most teens who do not know any better do. I applied and accepted any and every credit offer that came my way. It started with the retail stores but then it moved into the real deal. Well like anyone who is still learning about paying bills, I just did not realize that all this money I was being given had to be paid back!

Well I have been spending the last many years regretting my decision and piece by little piece repairing and rebuilding my credit. I am going to save you some of the time that I spent so long trying to figure out on my own. First off if you are in debt, do not panic.

Do not accept any offer you are given to pay down or pay off charged off accounts. At least not until you know and understand your rights.

Get a copy of your credit reports, preferably all three credit bureaus,Transunion, Equifax and Experian. There are several sites where you can purchase a free copy of your report. You are also entitled to one free report annually so you can request one directly from the bureaus website. One of the things you may want to know is that these credit bureaus all seem to have their own grading scale so you will find you have a range between your lowest and highest score. For example Experian always seems to have a much better score than Transunion or Equifax.

One thing you can do if you like is make use of one of those credit monitoring websites. I have been using Credit Keeper for about two years now and like it.

I also recommend you opt out, simply click www.optoutprescreen.com/ and follow the instructions. This will remove you from pre-screened credit offers and reduce how much traffic your report experiences.

Next take those reports that you have collected (a lot of people will disagree with me on this) if they are older than I would say two years, Dispute everything. It does not really matter what you dispute it for, because the great thing is if the creditor does not have accurate information on you then they can not continue to keep you in collections. People disagree because one, if it is your debt, you have a responsibility to pay it. Two if you do this to accounts that are to recent or have a high enough balance you risk having them now know your current personal information and if they left you alone before they will be back now.

Wait a month or two for a response from the bureaus to see what you have left to work with. Now if you have no credit cards get one or two. Make sure they are small and keep them that way. Use them maybe once a month to put gas in your car and then every month make sure you pay it back off completely. Capital One has a nice program call Credit Steps which is great for starting out. This will help you rebuild some of your credit standing.

Now any of the left over debt you had before, it's time to start working on it. I started small and then moved up. Contact these bureaus directly, you can try to use a "Pay to Delete" letter, here is one of many with a simple format for putting one together . Remember if you make any deals with the creditors to remove you from collections you need it in writing. Do not pay anything otherwise.

Now here is an important bit of information. Credit agencies can only hold you in collections for so long, seven years in my state I am not sure if they are all the same but I believe so. After this period they have to remove you, now you still owe them but they can not report you anymore. Most times when you are at or near this point the original creditor will chop you up to lost and sell off your debt to some vultures who will continue to try and collect. This is where the accurate information comes in to play. Most the time all the information is not complete when it is sold so these vultures have difficulty meeting requirements needed to pursue you. They will bully you and attempt to trick you into paying your debt. If you pay anything at all no matter what the seven year term starts all over, so if you are going to start make sure you can finish.