There has been no time in recent history when your credit score has been as important as in 2010. The vast reduction of available credit in the form of cut backs perpetuated by the credit card companies is the predominant reason for this. In fact, maybe you noticed that your available balance was drastically reduced overnight!
You may have noticed that it is getting harder and harder to be approved for a mortgage. The minimum FICO score necessary to be approved for a home loan has increased by 40 points. Additionally, the minimum score needed to obtain reasonable rates is up by 28 points.
The bottom line is that you can expect it to be downright difficult - if not impossible - to get new credit in 2010 if you've let your credit slip.
In light of this, you will need a strategy for hiking up your credit score this year.
This past weekend, I sat down and committed to paper my 2010 financial goals. I even included my goal of increasing my FICO score to 775.
I hope that you have decided on some financial goals for yourself. Once you have made a list of goals, you will need a plan for obtaining success. Erasing negative items from your credit report and improving your FICO score should be included in your overall strategy. A formula for achieving these goals follows:
Credit Strategy #1: Remove Any Questionable Negative Item From Your Reports
You should immediately attempt to remove any questionable late payment, repossession, collection, charge off, bankruptcy, or other negative item, by disputing the information.
You can do this yourself with a regular dispute letter which you can find here.
Often some items can be quite stubborn. Charge offs, judgments, and repossession are especially "sticky". You may need to get more aggressive than just a standard dispute letter.
You might consider a process called "debt validation" where you demand that the original creditor validate a debt. (It's a lot different than disputing with the bureaus - yet super effective for removing collections and charge offs.)
Debt validation is probably not something that you would want to take on yourself. The fact of the matter is, I tried it once and did such a bad job that creditors just ignored my letters.
At this point, I contacted Lexington Law and got one of its attorneys involved. My Lexington Law attorney was able to get all of my collections and charge offs removed by getting Midland Credit, a notorious collection agency, to notify and instruct the credit reporting agencies to remove these items.
You may not want to get a firm like Lexington Law involved. This approach is for people who are seriously dedicated to repairing their credit. If this is you, you can contact Lexington Law at (800) 636-3158 and speak to one of their paralegals for a free consultation.
Credit Strategy #2: Move Forward with Building Good Credit
If you have an unsecured account, this is pretty easy to accomplish. Pay your bills on time. It would be even better to set up an auto pay so your payment is never late. Doing this also saves you the cost of postage so you are actually saving money!
Rebuilding good credit can be more difficult if you don't have an unsecured account such as a Visa or MasterCard. Additionally, it will be very difficult to obtain one of these cards if your credit score is in the 500 range or lower.
Credit Strategy #3: Always Remember Your Goal and Keep It in Sight
It will take time to build good credit and remove questionable negative items, so don't lose your focus. Of course, the sooner you begin, the sooner you will reap the benefits of your hard work. Try tracking your credit score by jotting down your credit score as of today and then regularly thereafter. It will be rewarding to see your FICO score rise each month.
Don't become down-trodden if things don't work out the way you think they should. Different strategies may be available to tackle an issue. - 29866
You may have noticed that it is getting harder and harder to be approved for a mortgage. The minimum FICO score necessary to be approved for a home loan has increased by 40 points. Additionally, the minimum score needed to obtain reasonable rates is up by 28 points.
The bottom line is that you can expect it to be downright difficult - if not impossible - to get new credit in 2010 if you've let your credit slip.
In light of this, you will need a strategy for hiking up your credit score this year.
This past weekend, I sat down and committed to paper my 2010 financial goals. I even included my goal of increasing my FICO score to 775.
I hope that you have decided on some financial goals for yourself. Once you have made a list of goals, you will need a plan for obtaining success. Erasing negative items from your credit report and improving your FICO score should be included in your overall strategy. A formula for achieving these goals follows:
Credit Strategy #1: Remove Any Questionable Negative Item From Your Reports
You should immediately attempt to remove any questionable late payment, repossession, collection, charge off, bankruptcy, or other negative item, by disputing the information.
You can do this yourself with a regular dispute letter which you can find here.
Often some items can be quite stubborn. Charge offs, judgments, and repossession are especially "sticky". You may need to get more aggressive than just a standard dispute letter.
You might consider a process called "debt validation" where you demand that the original creditor validate a debt. (It's a lot different than disputing with the bureaus - yet super effective for removing collections and charge offs.)
Debt validation is probably not something that you would want to take on yourself. The fact of the matter is, I tried it once and did such a bad job that creditors just ignored my letters.
At this point, I contacted Lexington Law and got one of its attorneys involved. My Lexington Law attorney was able to get all of my collections and charge offs removed by getting Midland Credit, a notorious collection agency, to notify and instruct the credit reporting agencies to remove these items.
You may not want to get a firm like Lexington Law involved. This approach is for people who are seriously dedicated to repairing their credit. If this is you, you can contact Lexington Law at (800) 636-3158 and speak to one of their paralegals for a free consultation.
Credit Strategy #2: Move Forward with Building Good Credit
If you have an unsecured account, this is pretty easy to accomplish. Pay your bills on time. It would be even better to set up an auto pay so your payment is never late. Doing this also saves you the cost of postage so you are actually saving money!
Rebuilding good credit can be more difficult if you don't have an unsecured account such as a Visa or MasterCard. Additionally, it will be very difficult to obtain one of these cards if your credit score is in the 500 range or lower.
Credit Strategy #3: Always Remember Your Goal and Keep It in Sight
It will take time to build good credit and remove questionable negative items, so don't lose your focus. Of course, the sooner you begin, the sooner you will reap the benefits of your hard work. Try tracking your credit score by jotting down your credit score as of today and then regularly thereafter. It will be rewarding to see your FICO score rise each month.
Don't become down-trodden if things don't work out the way you think they should. Different strategies may be available to tackle an issue. - 29866
About the Author:
We raised our credit scores from the upper 500 range to 745 and 763 in under six months and got approved for our dream home. See proof of our credit repair success at www.creditforcouples.com and get the real truth about lexingtonlaw.com .
