Credit repair is capable of cleaning up your credit reports, raising your scores, and turning your financial life around. But you need to be an active participant. To get life changing results you must be prepared to work. Credit repair requires a new mindset about the credit bureaus, persistence, a willingness to confront collectors, the readiness to build and manage new credit, and the determination to organize your financial life. It's a job! But if you start now you will find that success is yours, sooner than you imagined. Just take the first step.

Your credit repair project starts with your credit reports. It's time to get a new mindset about the credit bureaus. They are not the enemy, but they do make mistakes. Your job is to find and correct them. Or hire a credit repair service to analyze your reports for you. You need to develop a critical attitude. A cursory review of your reports is not enough, you need to go line by line and hunt down every error. Keep an eye out for duplicate accounts, accounts reporting with balances that have been closed and paid, underreported credit card limits, and any derogatory items that you are not completely sure about. When in doubt, dispute.

Once you start the dispute phase of your credit repair project you need to be persistent. If a dispute is not processed to your satisfaction you should not give up. If you are convinced that there is a reporting error you need to fight back. Respond to the bureau's verification letter with a firm insistence that they have the creditor research the questionable item. A good credit repair service will always customize follow up letters to maximize the probability of success. Stick to your guns.

If you have active collections you need to develop a proactive approach to dealing with them. Once your credit repair project is underway you should never ignore a collection letter as it presents a great opportunity. The Fair Debt Collection Practices Act requires that collectors provide documentation verifying their ownership of the debt on request. But you need to do it within 30 days. If they cannot provide documentation they must cease collection efforts. This process is called debt validation. If you are a member of a credit repair service, make sure to send your collection letter to them promptly so they may contact the collector in a timely manner.

Your credit repair effort may eliminate derogatory information on your credit reports, but unless you have open and active credit your FICO scores are likely to be disappointing. The elimination of derogatory information will remove the dead weight holding down your scores, but without the buoyancy provided by positive credit your scores will not rise. Secured credit cards are the best option for most people in credit repair programs. Don't underestimate the power of a couple of small secured credit cards; they can be worth over 100 points within 6 months.

You are making an effort to turn your life around, and you are succeeding! Now is the time to insure that you don't lose any of your hard won credit repair progress. Create a budget and start a savings account. Don't think of a budget as an austerity program, it is a way of gathering information about your expenses. Good financial decisions should always be made thoughtfully, and that cannot be done without understanding your own financial abilities. And a savings account will provide a buffer for unexpected expenses so you will not fall behind when an emergency comes up. The best way to build a saving account is slowly but surely. Contribute a small amount from each paycheck. The key is to commit. Your account will grow gradually, and your credit repair success will be assured. Good luck!

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.