You’ve read all the basic advice on how to raise your credit scores – they include actions such as: pay off outstanding debt, use your credit cards sparingly, and pay all your bills on time.
If your scores are low right now and income isn’t coming very fast you may think there’s not much you can do about it, since you don’t have the money to pay off outstanding debt. But that’s not so. Even if you aren’t able to make ends meet right now, you can manage your money in ways that will be less damaging to your credit scores.
Maybe your situation is such that you simply can’t pay all your credit card bills any more. Pay one of them. Stay absolutely faithful and on time with just one account – preferably the oldest one. Also pay your utility bills on time. They used to report only delinquent accounts, but more of them are now reporting “paid as agreed” accounts.
Avoid finance companies. Doing business with them looks bad on your credit report. So if you can manage it, pay them off and then don’t go back. Avoid Pay Day Loan stores – they’ll suck you into a never ending spiral of debt. Resist the temptation to apply for an in-store credit card. Some experts say applying for one of those cards can reduce your score by up to 20 points.
Prioritize: Pay the most important debts first, and pay them on time. Your house, your car, your utilities, and your credit cards.
If your credit scores are suffering because you refused to pay an account in dispute, or if you had a temporary credit problem due to illness or other personal setback, add that information to your credit file. Simply write a letter to each credit bureau that is reporting the negative information, and explain the reason. You have a right to do this under section 611(b) of the Fair Credit Reporting Act. Ask that the information be added to your file exactly as you have written it, then ask for a copy of the updated report.
Not all creditors look at your report entries, so not all will read your note, but some do.
Take care in composing the letter, and don’t write it at all if there isn’t a very valid reason for your delinquencies. Experts disagree over the benefit of such a note, and while some believe it will help, others believe it could be harmful to your credit scores.
This will stay on your report for 2 or 3 years before being deleted and will be seen by anyone who accesses your report. Thus, don’t use foul language or name-calling – simply state the facts as you see them.
Author: Mike Clover
CreditScoreQuick.com
