How to Repair a Bad Credit History

on 8/8/2006 Dispute every negative item on all your reports, keep on disputing until the creditor removes it.

Dispute any late pays as "pays as agreed" or payment never late. If the creditor does not respond within 30 days, the bureaus are bound by law to remove the negative listing from your file and you file will read "pays as agreed" and "payment never late" which will turn a negative item into a positive one.

Keep the balance on all your credit cards, or revolving credit, under 25%. If possible, get the balance down to 0 at the time of the month the creditor reports to the bureau's. You can ask the creditors and they will usually tell you. This is huge and can impact your score up to 80 points.

If you don't have any credit cards, apply for 2 secured credit cards that report to the bureau's. Use them to buy a cup of coffee or some other small item once a month and pay the balance immediately. Make sure it has a 0 balance owed at the time its reported to the credit bureau's.

on 11/22/2005 Time heals all wounds. Repairing credit is not a job that can be rushed. I had a very low FICO score (low 400's). It has been 1 year of reestablishing myself. I now have a 600 score. It's not perfect, but it's not bad for a year's worth of work.

I opened installment accounts (2) with low balances but paid as agreed on time each month. I applied for two credit cards (someone finally gave me the opportunity to try again after 3 unsuccessful attempts) and pay them on time every month. The best suggestion that I can give, however, is to pay your bills on time! If possible do like myself and set everything up on automatic bill pay, where you know the bill will be paid on time each month. If you are not in a financial situation where you can set up automatic debit, and know the funds will be guaranteed available, then it is a good chance that you are not ready to manage credit until your finances are taken care of. Avoid using a lot of your available credit. It does impact your score. Another thing that helped my FICO score was all of the incorrect information on my credit score. I disputed misleading, false, or incorrect information and it had a dramatic affect on my score.

on 11/22/2005 File your dispute at www.Equifax.com, www.Experian.com, and www.Transunion.com. It's a lot easier than the mail. Also, if you have a formal complaint about a collection agency, you should file complaints with the Better Business Bureau (www.BBB.org), the Federal Trade Commission (www.FTC.gov), and/or the American Collectors Association. You can send a collection agency what is called a "cease and desist" letter to prevent them from calling or writing.

on 11/22/2005 credit ratings are usually slightly lowered each time an inquiry is made about an individual's credit history. It's a good idea to avoid applying too often for cards.