Deciding to undertake the task of repairing your own credit can, at times, seem daunting and overwhelming. Whether you do it yourself, or enlist the help of an organization like Commonwealth Credit Solutions, it’s important to remember and practice these better credit habits.
Do pay all of your current bills on time. Remember, 35% of your FICO score is payment history!
Don’t apply for new credit as you begin repairing your current situation. You’ll want to avoid unnecessary credit inquiries for now.
Do send all correspondence to creditors and the reporting agencies by certified mail with return receipt. Make sure to read “terms and agreements” before attempting to dispute anything online as any future dispute could possibly be marked as “frivolous” by certain bureaus!
Don’t use more than 25% of your revolving credit as it can have a significant impact on your score, as much as 30% of your FICO score is determined by available credit. For example, if you have a credit card with a $1000 limit never use more than $250. The biggest misconception is that if I pay my card off in full every month it doesn’t matter how close to the limit I get. This is simply not true, if your credit card bill is not due until the 20th of the month but gets reported to the bureaus on the 15th, that is the balance that is reported regardless of what you paid the previous month or plan on paying on the 20th!
Do invest in a credit monitoring service like IdentityIQ or Privacy Guard that will give you your 3 bureau credit scores every month. Sure, a surgeon could perform an operation without an x-ray but that would be a poor decision. Same goes for repairing your credit without using a tool like credit monitoring.
Don’t close old accounts, even if you had a late payment or two many years ago. It’s more important to maintain the length of history with that account even if there are a couple of blemishes in the distant past.
Do practice patience. The credit bureaus have 30-45 days to respond to your requests. Avoid making a serious error and sending additional letters before receiving a response from your previous attempt.
Don’t become discouraged by stall or scare tactics from the bureaus or creditors. Stay the course, if you feel overwhelmed and need help simply call the professionals at ilovemycreditscore.com for advice at 502-917-0077!