How to Repair Your Credit by 50 to 100 Points

Get a Lower Interest Rate by Repairing your Credit

Changing your buying habits requires a real mindset change. In order to make your money work for you, it’s best to do so with as little debt as possible. If you need money, then it’s best not to have to pay too much for it. While we don’t normally focus on credit repair, we thought this was interesting.

Since the average American retires with a net worth of $25,000, much of that could have been increased by not spending so much on interest. Consider the fact that when you buy a home, you actually pay for it 3x. That’s quite alarming when you think of the money wasted on interest! But that’s beside the point.

How to Start Repairing Your own Credit

If your credit is in the 500′s or 600′s or maybe lower, there are some steps you can take to begin repairing your own credit without an agency.

  1. Write letters to the creditors / bureaus contesting your credit score or disputes
  2. Stop making bad financial and credit decisions
  3. Pay your debt down on current credit cards to at least no more than 40% of the card’s limit
  4. Make your payments on time

 This video should help you understand how your debt affects your credit score

These are a few of the time-tested ways to get your credit score moving in the right direction. There are of course many other avenues of raising your credit score. Working with a company for example who makes it their business to raise credit scores could be a great choice if you have a more immediate need for a higher credit score. Perhaps you found the home of your dreams or that car you always wanted. There’s nothing more embarrassing then to have your credit denied when you’ve gone to all the trouble of shopping for the things that make you feel like you’re about to live the dream.

It is recommended that you have at least three or four trade lines in good standing where you’re making that monthly payment on time.

Sending dispute letters

One of the little known methods for bringing your credit score up is to send dispute letters to the bureaus. The bureaus then send the credit companies letters and the company has 30 days to respond to the dispute. If there is no response, then items may be removed from you credit history. This is perhaps one of the best ways to get your credit moving fast. There are, however, some caveats to sending dispute letters. You must send them at an interval that the credit bureau will not view as frivolous. If you try to rush the disputes, you may end up shooting yourself in the foot because your efforts will have been in vein. There are also the types of letters and packages you need to send. It is not good enough to only send a letter to the bureau or company. The letter needs the necessary legal jargon for a dispute letter to be handled. If you don’t get it right, your letter will have no effect.

Fair Credit Reporting Act is in Your Favor

The Fair Credit Reporting Act is actually a good thing for consumers. This act requires that all bureaus, Experian, Equifax and TransUnion, give each dispute a fair review. But since the bureaus themselves rarely look at the letters, they send them to the lender. Lenders also rarely review dispute letters, so their only option is to either deny or accept your dispute. The only way to get their attention is to send multiple letters to them over a fairly short period of time, then the “squeaky wheel gets the oil.” You have just won a small battle with a credit company.  The difficulty with this is finding out what to write in each letter as the campaign is carried out. This is often when you either need legal help or your need to hire a credit repair agency. Doing this will be one of the greatest things you can do for your financial future. And the cost of the services are usually paid off shortly in exchange for a lower interest rate.

How much does it cost?

Credit repair varies from company to company and you’ll rarely find anything on their website. Prices vary from $89 to $149 or more for each month a campaign lasts, and a normal campaign is 4 to 6 months. One Los Angeles credit repair company that we know of charges $79 per month and guarantees results of 50 to 100 points in 4 to 6 months.

To find out if having your credit repaired is right for you, just ask yourself when you need good credit, and how good it needs to be. If it can wait for a year to get 50 points higher, then do it yourself. If you need 100 points to barrow money for that new home, then get some help with an agency.  We hope this has been helpful, please comment if you have any questions.