Credit Repair 101

Having great credit can be synonymous with having power. It is essential to maintain good credit to seize lucrative opportunities that may not be available otherwise. If your credit is poor, it is never too late to begin the journey to credit repair.

Several years ago, my credit was below standard. It was primarily due to not having a strong credit history/profile. I tried to repair and build my credit on my own by reading credit repair books but it was unfruitful. It was not until I was introduced to a credit repair company in the same period that I was looking to purchase my first home that things began to shift in my favor.

Ironically, a representative reached out to me, by the perks of effective marketing strategies, stating that he was aware of my home-buying venture and offered a concise plan to better my chances of securing a home loan. I dodged his advice due to skepticism at first but was later persuaded to allow the company to aid me in securing a lower interest rate. They informed me of the many ways to outsmart creditors and have items removed from my credit legally.

One manner was to contact the creditors directly and settle my debt for much less than what was due after demanding to receive a documented settlement offer. The process was solvent. After successfully closing on my beautiful condo in Atlanta, I continued to apply the techniques I had learned to maintain good credit. Learn more about selecting the right credit repair company.

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11 Ways to Repair/Improve Credit

Negotiate a Settlement

Creditors are willing to settle your debt for much less than what you owe. Do not be intimidated to negotiate for less. The creditors/collections agencies would rather receive some funds from you to end the relationship than to continue to pay a collections agency to nag you. Be sure to request that the agreed settlement amount be put in writing before issuing a payment.

Obtain a Secured Credit Card

Apply for a secured credit card when attempting to build credit. A secured credit card functions more or less like an unsecured credit card but with your own money. Banks usually request a down payment of about $250 or more to commence. After about a year or so of using a secured card responsibly, you should be able to qualify for an unsecured line of credit.

Know When Credit Activity is Reported to the Bureaus

Creditors report your most updated credit activity to the credit bureaus (Experian, Equifax, and Transunion) on a monthly basis. You may want to contact your bank(s) to determine what time of the month they report your most recent activity to the credit bureaus so you’ll be aware of when information such as paying off your balance will reflect on your credit report.

Request Credit Line Increases Regularly

Ask your creditors for a credit line increase annually or semi-annually. Be modest in your request. They will only give you what you qualify for anyway. It helps if your income has increased from the time of the previous request. Most companies allow online requests.

Maintain Healthy Spending Activity

Keep regular spending activity on each credit card by using them monthly or quarterly and paying them off on time.

Remember the 70/30 Rule

Maintain 70% of your credit card’s limit at all times and make an effort to only spend 30% or less. Doing so shows creditors that you do not habitually max out your credit cards and thus you look like a reliable individual to them.

Select Credit Cards with Rewards

Aim at selecting credit cards that offer incentives like travel perks, cash back, discounts on gas, shopping, restaurants, coffee, etc.

Know the Fine Print

Make time to speak to a representative about the fine print of each credit card. Benefits such as rental car discounts, added fees for international spending, and the like should be revealed succinctly in the conversation.

Know Your Credit Profile

Monitor your credit activity, report, and FICO scores regularly by registering on Credit Karma. It is a free service.

Select Credit Cards with Low Fees

Select credit cards with the lowest annual percentage rates, if possible. Also, look for those with low or no annual fees. In addition, select credit cards that have low late payment fees.

Cash is King

Remember that you should use a credit card as if it were cash. If you don’t have or know you won’t be in close proximity to having the cash, do not swipe your card. It is frivolous.

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What are some tips you’d like to add regarding having healthy credit card spending habits?

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