Long term damage from late payments, missed payments, bankruptcy, or other credit issues can not be cured with an instant credit repair. Resolving a long history of bad credit takes time and problems like bankruptcy or foreclosure stay with a person for years. There are steps a person can take improve their credit fast, however. Be sure the tips below have been or are being implemented.
The Big Three
The three major credit reporting agencies are Experion, TransUnion, and Equifax. Start your ‘instant’ fix by contacting each and obtaining a copy of your credit report. It is important to get a copy from each because trade line items can vary from company to company, resulting in a variance in the FICO score listed. The next step is to carefully examine each report and circle any items which are unfamiliar, should have been discharged in a bankruptcy, or of which you were unaware.
The items included in Chapter 7 bankruptcy are often left on the credit report until these agencies are contacted and instructed to remove them. These items continue to damage credit scores, and if a potential lender sees them, it will negatively affect the terms they are willing to offer. Another important reason to check these reports is to ensure you have not been the victim of an unknown identity theft.
Write and Call
Contact Equifax and the other agencies to have incorrect or obsolete information removed. Suggested letter formats are available through many websites or non-profit debt repair organizations. Next, examine accounts and divide those in collections from the ones still open. Contact credit card companies who you are late paying and get the account in good standing, or find out what is necessary to do so; pay on time and do not let these accounts deteriorate further.
Next contact debts which have gone to collections; if the debt has gone to a third party agency, find out if they have a deadline to settle by. Resolve to come to an agreement and settle before this date, or be prepared to go to court. Settlements will cost between 40 and 60% of the original amount owed, but be sure to verify the account first and get a receipt of the transaction. You must report all settled debts to the ‘Big Three’ to ensure it has a positive affect on the FICO score in as short a time as possible.
Money Talks
Aside from clearing outstanding debts and making payments on time, saving as much cash as possible will be helpful in getting a favorable loan. When applying for a home mortgage, the borrower with poor credit history will be required to have a larger down payment to borrow money; the more the lender can reduce the obligation of a risky debtor, the better the chances they will not go into arrears.
Final Word
Stay on top of your credit report throughout the process, and have patience. Even a fast credit repair can take several months to make a difference to a lender. Keep to the path of being debt free and never look back.
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