3 Tips To Repairing Your Credit and Increasing Scores

Having good credit is very important because we live in a credit driven society.

We need a good credit score to get approved for a mortgage, auto loan, insurance, rent an apartment, a loan and yes employers are now looking at their applicants credit reports to make hiring decisions.

Here are my 3 Tips to Repairing Your Credit and Increasing Scores…

There are more things that you can do to repair your credit and increase scores, these are the top 3 that I see that are holding my clients back when we review their credit reports.

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  1. Charge offs and Write Offs – these are accounts that once an open account such as a credit card account and has went bad.

The original creditor has to charge off or write off the debt to take it off of their accounting books. A lot of people think when a creditor charges off or write offs an account they don’t owe the money anymore. The truth is the original credit has 3 options to deal with the charge off / written off debt.

They can hire a debt collector to go after the consumer to collect the debt or they can sell the debt to a debt collector. The third option is to submit a 1099 C Cancellation of Debt to the IRS.

When an original creditor submits a 1099 C Cancellation of Debt the IRS will consider the amount of unpaid debt to the creditor as income to the consumer who had the account.

After you find out what the original creditor has chosen to do with the account. You can start the process of getting the account removed off your reports.

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2. Pay Down Your Credit Card Debt – paying down all your debt is important but credit card debt effects your credit more than other types of debt. I’ve reviewed thousands of my clients credit reports and from what I’ve gathered. You should only carry 25% – 30% of your available credit month to month on your credit cards.

For example: $1,000.00 available you can charge.

You can charge 100% but you should pay it down to 25% – 30% by the time of your billing cycle. Because it will get reported to the bureaus and even if you pay it off it will look like you are carrying too much debt by maxing out your credit cards.

3. Making Payments On Time – everyone knows you should make monthly payments on time, but I don’t think most consumers know just how much a late payment can impact their credit scores.

Having late payments even if you make the payment later in the same month will hurt your credit and credit scores.

Steven A. Williams, President & Founder – The Credit Repair Shop

Looking to Repair Your Credit & Increase Scores – Click Here