For the record, there is nothing wrong with using credit cards. But if you are attempting credit repair you must understand the relationship between your card balances and your scores. Max out your cards if you must, but pay them down if you need your credit scores to be at their best the next 60 days. A maxed out credit card can cost you over 100 points on your credit score.

Opening a store card may mean getting a discount, and saving money is a good thing. But store cards carry a triple credit repair threat. First comes the inquiry, next is the hit you get from opening a new account, and last is the high likelihood that the credit limit will be set very near the amount of your purchase. Together these three add up to major credit repair trouble.

If you are getting ready to get a mortgage you better stop all non-essential credit activity. Too many people make the error of purchasing furniture, appliances, decorating items, and more, on credit, in advance of closing on their home. All of this credit activity can set your credit repair effort back and kill your credit scores at the very moment you need them the most.

When it comes to your credit score, old accounts are good accounts. As a credit repair rule of thumb, if you wish to optimize your credit scores, you can aim for having five open credit cards, including MasterCard, Visa, American Express, and Discover. If you have accumulated more than five you may close them without worry, but otherwise don't close your accounts or you will hurt your credit repair effort.

If you pay for an item with a credit card and then return it, the store will credit your card. This does not mean that you don't have to make your scheduled credit card payment. Don't count on refunds or amounts in dispute to offset a scheduled payment or you will almost certainly end up with a late payment on your credit report and more unwanted credit repair problems.

If you dispute an item on your credit report you will be offered the opportunity to make a statement of up to 100 words. Don't do it. I'm sorry to report that no lender will consider your story. Your comments are of no credit repair value and will only serve to draw attention to the issue and may even linger long after the derogatory item has fallen off. If you have made a statement you may write to the credit bureau to have it removed.

No matter how bad your credit may be it is important to start the rebuilding process right away. Many people decide to wait until their credit repair efforts have succeeded. Credit rebuilding is not the second phase of credit repair, it should be done concurrently. If you can't get approved for regular credit cards, rebuild your credit with secured cards.

Don't believe your eyes. Three quarters of all credit reports have errors. Just because a derogatory item is on your report does not means that it is correct. Errors may be generated by creditors, or by deficiencies in the credit reporting software itself. Because of the loose standards used by the credit bureaus for matching data millions of people have information on their reports that belong to other people.

If you get a letter from a collector don't ignore it. You have thirty days under the Fair Debt Collection Practices Act to demand the collector document their legal right to collect. This is an important credit repair tool. You also have the right to ask for an objective accounting of the amount they say you owe. If the collector cannot provide the documentation requested they must cease their collection efforts.

You don't have to manage your credit repair on your own. If you are too busy to make the effort that credit repair requires just contact a reputable credit repair service. They will insure that everything possible is being done to clean up your credit reports and maximize your scores. Good luck!

Copyright © 2008 Ian Webber. All Content. All Rights Reserved.