How can I repair my credit?
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Ashley M wants to know:
I ruined my credit in college and as a result I have about $10,000 in debt. Most of the accounts are in collections, charge offs, or past due. The only thing positive on the report are my student loans and my car loan. I have heard of disputing the reports, but I also want to find a credit repair firm that will allow me to make payment arrangements. I want to improve my credit rating so that I can purchase a home in a few years, get approved for more credit cards and also get a new car.
I ruined my credit in college and as a result I have about $10,000 in debt. Most of the accounts are in collections, charge offs, or past due. The only thing positive on the report are my student loans and my car loan. I have heard of disputing the reports, but I also want to find a credit repair firm that will allow me to make payment arrangements. I want to improve my credit rating so that I can purchase a home in a few years, get approved for more credit cards and also get a new car.
Tagged with: Car Loan • Credit Rating • Repair Firm
Filed under: True Credit
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I recall one of my techs asking me how he can have money left at the end of the week. I told him to divide his net by seven and spend that amout each day and he will have money left at the end of the week. I know it sounds pretty basic but it works. What you must do is spreadsheet all you financial commitments and monitor them weekly to get used to your limits. The bottom line should be your cash flow. If your not aquainted with Excel do some studying it will make your life so easy. Good luck.
You can save a little money by taking care of the bad debts yourself. All you have to do is first, pull your credit report. Dispute anything that isn’t yours. Next, call each of the creditors and/or collections agencies. Offer to make a settlement payment. It’s sometimes only half of what you owe. You can often set up installment payments with the lender.
It will be a bit easier to employ a Consumer Credit Counseling agency, but beware! Make sure the agency is a 403C Non profit agency. Otherwise they will charge you an arm and a leg!
You can do it, because I repaired mine. I took a score of 465 and improved it to 678 so that we could buy our home. It took us about two years to do it. You need to start with a 3 in 1 credit report so that you know where all of your debt is. Then you’ll need to start contacting you accounts so that you can make arrangements. Also you can dispute any account that you feel is inaccurate. Listen, I have a web link that can help you repair your credit. The link is located on my yahoo answers profile…
Well, it’s a good thing that you’re wanting to take care of that. Now, it’s just a matter of figuring out what to do. I have some advice that worked for me.
First I gathered all my reports (which I presume you’ve done that already) and list all your debts. What you’ll need to note in the list is the amount and the length of time of the debt.
I used a formula. I treated debts that were 4 years an older completely different from others that were less than 4 months. How I came up with this formula was based on the statue of limitations. There’s 2 different statue of limitations, one for reporting and one for collecting the debt legally in court. The statute of limitations for reporting the debt is 7 years, while the statut of limitations for collecting the debt legally in court can vary from state to state. In some cases, collectors bank on the notion that you’re unaware of this, and still try to collect from you anyway. But you can use this as a negotiation tool when approaching collectors to settle up with debts.
When you do want to do this, what you may want to have to things for ammunition. Knowledge of this, and a sizable amount ready to give them on the spot. I’ll give you an example. You have a debt for $2,000 that was charged off 6 years ago. The statute for reporting on it has about one year left, while the statute for collecting on it in court has already long expired, yet you want it off your record quicker, you can contact the collector and let them know that although the statute of limitations has expired for legally collecting this debt, you would still like to receoncile for a “payment for deletion” for 40%, or $800. They may or may not go for it, but if they do, before sending them anything, have them fax AND mail you something in wiriting on their company letterhead of the terms of the agreement and send a cashier’s check certified mail. Do NOT give them your checking account information for whatever reason, as it would give them access to try to take money from you at a later time.
If the debt is less than 4 months old, expect to pay the full amount, but you could still use the “payment for deletion” strategy. This strategy is the most effective when you have a large sum of money to equip yourself to pay the debt off in full. There’s a slight chance that you could work out a payment plan to have it completely removed, but it’s very rare.
Now the strategy you can use after you’ve zeroed your debt, is now you have to build some positive credit back up. The easiest way to do that would be by asking a close friend or family member with excellent credit to add you as an authorized user to a couple of their oldest credit cards. Now it would help if the balance was low, and they paid on time, or else it won’t do that much good. Once it does start reporting, you may want to apply for one maybe two credit cards yourself. Another thing is to take out a secured installment loan. Now that would require you to have something in savings(ideally $2,000) that could be tied up for a while (18 months – 2 years) but you still could make money of the interest by not only keeping it in your savings but by taking the proceeds from the loan and investing it in a certificate of deposit. Not only you would always have the money available to readily pay bak the loan if necessary, but you could get a little interest while building up your credit at the same time. My suggestion is to get a loan for no longer than 2 years, but keep the CD for about 18 months, cash it out then pay off the loan.
Another thing you can do is report rent, utilities, cellular phone, and other monthly payments that don’t show on your credit reports thorugh PRBC. They’re a credit bureau that provides “alternative credit” as a means of helping people that don’t have credit build credit and helping people improve it by showing that they creditworthy by how the pay on time. Under federal law, you’re entitiled to have your PRBC report considered with your regular credit reports when applying for credit. Payments from 3 years prior can be verified and reported for a small fee ($10-20/per account) and current and future payments can be reported by using their billpay service by CheckFree Web for $4.95/month. There’s a lot that I wasn’t able to cover all in this answer, but I provided the link so that you could see for yourself, I hope that this answer is some help to you,
Good Luck!
Students are increasingly worried about credit repair and credit scores – and for good reason. Student debts are rising and the numbers of students who leave school with ruined credit scores is rising as well. Many experts blame larger credit card debts and rising tuition costs (that lead to larger student loans).
Despite the pressures of today’s student life, it is possible for college student to leave school financially sound and in fact to develop good financial habits that can lead to a lifetime of financial success. By following the free credit repair advice in this article, college students can learn tips that can make the college years a credit-booster instead of a credit disaster:
Free Credit Repair Advice Tip #1: If you are a student (and especially a student with student loans), budget carefully.
Student loans need to be paid back and are more and more often for large amounts. Sticking to a budget can help you to establish good credit habits that can help ensure that you have a good credit score when you leave university. Read more about it at: