Total credit restoration is possible and can be achieved. In order to have a total credit restoration it will take you seven years (10 years for bankruptcies, 15 years for
unpaid tax liens) from your last reported late payment on your credit report. However, don't get discourage because you can still obtain a good to excellent credit score with some negative items
Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical formula, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor. A total number of points — a credit score — helps predict how credit worthy you are; that is, how likely it is that you will repay a loan and make the payments on time. Generally, consumers who are good credit risks have higher credit scores.
The steps involved for total credit restoration are basic and simple. First, make sure all the information on your credit report is accurate by ordering a free copy of all three nationwide credit reporting companies by visiting the website annualcreditreport.com or by calling 1-877-322-8228. Once you reviewed your credit reports and if you feel there are errors on your credit report file, tell the credit reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report that you dispute, state the facts and explain why you dispute the information, and request that the information be deleted or corrected. You may want to enclose a copy of your report with the items in question circled. Send your letter by certified mail, return receipt requested, so you can document what the credit reporting company received. Keep copies of your dispute letter and enclosures.
Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly.
Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line. Finally, if you have bad or no credit and have no credit cards try to obtain two credit cards and make sure all of your monthly payments are made on time. This will help increase your credit score. If you cannot be approved for a unsecured credit card, obtain a secured credit card.
A credit bureau will not remove accurate negative information from your credit report before the legal time period has expired. Therefore, do not believe anyone who claims they can get negative information removed from your credit report faster than is legally required.
Remember, total credit restoration is not necessary to obtain the best interest rates on loans and credit cards.
Did You Know? A new law requires commercial websites that say they offer free credit reports to include a box letting you know you can get a free credit report at www.AnnualCreditReport.com. Click on the link to www.AnnualCreditReport.com, the only place to get the free report that's yours by law. Many companies claim to offer free credit reports and some do, but others give you a report only if you buy other products or services. Still others say they are giving you a free report and then bill you for services you have to cancel. If you go to www.AnnualCreditReport.com and follow the prompts for your free credit report, you can be sure the reports you get really are free.