How I Repaired My Credit
Credit Repair
Over the period of the last few years, my credit score went up from 480 to 801. I employed many techniques to achieve this, but the real big factor was persistence.
History
Five years ago, my mom and I were trying to buy a house for my teenaged sister and brother. We weren’t quite familiar with the intricacies of credit scoring. Mom applied for the loan since she had owned property many times in the past, and she expected no problems in getting the new loan. We had the necessary down payment and both of us had good jobs. But we were startled to find out that her credit score was just 450. Sure enough, she was denied the loan.
Being the caring brother that I am, I decided to apply for the loan myself and buy the property. I presumed I had good credit, but boy, I was far from being right. My credit score was only 480 and unsurprisingly I too was denied the loan. I had defaulted on many credit card payments and student loan payments in the past. I just assumed that since I didn’t have any bankruptcies or collections my credit score was good enough. Obviously this incident showed my lack of education about the credit score system.
Luckily, my cousin helped me out. He bought the house we needed and waited a year for me to raise my credit score and bring myself to purchase the house. I was embarrassed but also very motivated to raise my credit score.
Credit Repair Dispute Letters
I started my quest to educate myself and increase my score. Mind you, this was many years ago. Ways of raising credit score have changed a bit today. I didn’t have the money to hire a credit repair service, nor was I able to find a single resource that was authoritative on the subject of how to repair credit score. I read various forums and then developed a strategy to raise my score. Basically my strategy was writing letters every 45 days to challenge negative items on my credit report. I would then buy a credit report online, assess the items to see the difference, and submit letters again to challenge the other negative items. It took me more than two years to go through this process. One year later, I managed to lift my credit score to 690, more than enough to buy the house from my cousin. Realizing the importance of having a high credit score, I continued working on it.
Credit Cards
I used two other techniques to repair my credit score. Firstly, I used my credit cards tactfully. Before starting the process of credit repair, I had only two credit cards, both having outstanding dues. I promptly paid down both of them. Then, I used the cards in rotation on a monthly basis. I also fully paid the balances every month. I found that once I paid off a card and left it behind for a couple of months, the credit card companies would themselves offer to raise my credit limit if I used their card. Sometimes they would raise the limits without even asking me. Gradually, I succeeded in increasing my credit limits to an extent that helped raise my score rather than reduce it. About half way through my credit repair process, I started applying for new credit cards that had better terms and conditions than those that I held. I did this as early as I could, because time is a big factor that harms credit reports when applying for new credit. Today, I have several great credit cards with great credit limits.
Online Bill Pay
Next in the process of repairing my credit score was online payment of bills. After I graduated from college, there was no excuse for not paying my bills. After all I had the money, but I lacked the organizations skills required to track my bills efficiently. Online payment changed it all. Initially, it helped me effortlessly add each bill as it came in. Today, almost each one of my bills can be handled electronically. In the past eight years, I’ve had just one late bill. I not only managed to raise my credit score, but I no longer needed to cope with the late fees I had become so accustomed to. Mind you, paying one bill late doesn’t cost you credit. Companies mostly ding your credit only if you miss two bills consecutively.
Combine Your Account with Someone with Great Credit
Lastly, I married a woman who had a fabulous credit score. We purchased our first home together. It was then that I asked her how she’d managed to jack up her credit score. I told her about all the hard work I’d done to bring my score to what it was at that time (760). She gave me an interesting reply: “I just paid my bills…! What else?” Oh well, if only it was so easy for me. If you are lucky to have a spouse with a sky high credit score, your score will go up as well once you begin combining your accounts.
Persistence Pays
There is no particular easy way out to mend your credit. If yours is as poor as mine was, you’ll need a lot of effort and persistence. But once you get into the good habit, the outcome will be magnificent. Today I always qualify for the best interest rates when applying for credits. The only downside is that I have to deal with a dozen new credit card offers a week.
