How to Improve Credit Score – 6 Steps to Repair Your Low Credit Score

Credit repair

Credit Repair

Credit Repair

This site was developed to help others improve their credit score. My credit story in short went this way. At the end of 2008 I had a high credit rating 740+, suddenly life events happened and found myself a few years later in a situation where my score was at one point 415, most of it due to the 2008 economic downfall, unemployment etc. All this thru almost no fault of my own. Except not having the money to pay. Today I have managed to bring back my credit score to a respectable level once again. I did not pay any credit repair counseling service co. but did it on my own. That being said, I thought how many others could benefit from this information?

Most of this is public information, and not a big secret. So, I am putting it all together here. The basics are here for you, take advantage and fix your credit score. Good Luck!

Repair Your Credit – Six Easy Steps

In fixing your score you need to realize that there is no quick solution, with the exception of a few things you can do to improve the score in the near term. Such as lowering some balances and or reshuffling some balances around, the real improvement is going to take some time. You need to manage your credit like you would a stock portfolio, by watching it carefully and learning all you can.

Step 1 – Learn

Learn how the credit bureaus compute your scores. if you know what is being used to figure your FICO score then you will make better credit decisions. Here is an article to read.

What comprises a FICO Score?

Your Rights under the Credit Reporting Organizations Act 

Step 2– Get a copy of your FREE annual credit report

Request a copy of your credit report from the credit bureaus. By Federal law you are entitled to receive a free copy.

The Credit Bureaus

Get your Free Credit Report

Step 3– Review

Check your report for any erroneous information. If you find any, dispute it! For example check to see if any reported late payments are incorrectly listed for any of your accounts. Check to see if the amounts owed are accurate for all your accounts. You may find that the balance showing is much higher than reality and this affects your score negatively. If you do find errors, dispute them with the credit bureau. Any collection accounts that may be paid off as well. While they can not be removed. check for accuracy.

Dispute Credit Report 

Here is a sample letter you can use.

Step 4– Pay Down High Balances

Focus on your high balance credit card debt balances and pay these down. This will boost your score as soon as it is reported. Your objective here is to keep your balances low on credit cards and revolving credit. If your balances are high then use the strategy of paying down the highest balance cards. Avoid moving balances around since this strategy can actually hurt your score. If you pay off an account, or you do not use it, do not close the account as this can also hurt you if the account has a long history then this establishes how old your credit is. The older the better. Finally do not open new credit card accounts if you do not need them.

Credit Score Myths


Step 5-Pay on time

Set Up reminders to make your payments on time. As this is one of the biggest factors that contribute to your FICO credit score.If you can setup automatic payments for the minimum due, do it, at the very least your payment is in on time. Stay current, remember that payment history is 35% of your FICO score. so stay current, did I mention to stay current. While it is not easy to pay down a credit card, reducing the amount you owe is going to accomplish your objective. So stop using your credit cards, the end result will be quite gratifying when you see your credit score rise. Use your credit report to see what accounts you have, then compare the balances against your monthly statements. Determine the balances and interest rates you are being charged. Take the highest interest cards and pay those first, and only pay minimum payments on the rest of your accounts.

Step 6– Be patient

Repairing your credit and fixing the errors will take discipline and effort. Then watch your credit score rise and always keep an eye on it.





FICO Scoring

There are many scoring models in the US, however 90% of credit decisions are based off of FICO score model. Interesting to note that scoring models can be tweaked by industry or companies. There is not one universal model across all places you might apply for credit. Example. you could apply for a automobile loan and a mortgage the same day, which by the way is not recommended, and be told two different scores altogether. because the car companies use a different scoring algorithm and it differs from say a credit card or for a mortgage score.

Average Credit Scores

According to Experian

  • Average credit score in entire USA is 687
  • State with the best average credit score of 718 is Minnesota
  • Florida ranked 39 out of 50 states with an average score of 678


Credit Scores and Mortgages

As credit scores relate to Mortgages these are some benchmarks, these are not standard in the industry but are pretty close to what you can expect. They vary from lender to lender. Scores range from 300-850 The higher the score means you are a lower risk. keep in mind that every lender has their own criteria for determining an acceptable credit score for their product.

  • 560 – Minimum Score for VA Loan
  • 580 – Minimum Score for FHA Loan
  • 620 _ Minimum Score for Conventional Conforming FNMA / Freddie Mac Loans
  • 680 – 720 – Minimum for many Bank Jumbo loans, some are lower depending on the program.


Credit report The loan processor requests the borrower’s credit report. The credit report is an important part of the loan approval process. Of the two types of credit reports, consumer credit and mortgage credit, this discussion centers on the latter.

A credit report is the product of information accumulated from a thorough check of the creditors indicated on the loan application, as well as a review of the public records to discover whether any lawsuits are pending against the applicant. When completed, the credit search company sends the loan processor a report of its findings.

Information included in a credit report The credit report usually states the applicant’s (and co-applicant’s) age, address, status as a tenant or an owner, and length of residency at the current address; it includes a brief employment history and credit profile, both past and present. The credit profile itemizes the status of current and past accounts, usually identified by industry, such as banks, department and specialty stores, and finance companies. In addition, it indicates the quality and dates of the payments made and their regularity; delinquencies and any outstanding balances also are reported. The payment history is the most important part of the report because it indicates how well the applicant has managed debt over time. Underwriters view a person’s past behavior as the best indicator of future attitude toward debt repayment. Research tends to reinforce these opinions, indicating that slow and erratic payers generally retain those attitudes when securing new loans and that prompt and steady payers also are consistent in meeting their future obligations.

When a credit report reveals erratic and delinquent payments, the loan will probably be denied. An applicant who is denied a loan because of adverse information in a credit report has the right to inspect a summary of that report, to challenge inaccuracies, and to require that corrections be made (see the most current RESPA-required brochure, Your Home Loan Toolkit. If one or two unusual entries stand out in a group of otherwise satisfactory transactions, the applicant will be asked to explain these deviations.

Credit reporting, because of the internet, has become much faster. As an unintended consequence of the internet, fraud in the use of credit reports has increased dramatically. Credit reports should be used only by the persons or institutions requesting the information and only for the purposes stated.

After the deposit and employment verification are returned with acceptable information and a favorable credit report is obtained, the lending officer will continue with the loan process.


How long does accurate information stay on my credit report?

If the information in your credit report whether negative or positive remains in your report for several years. It can take a while for it to come off. Here’s how long negative items can remain on your credit report:

  • Late Payments: 7 years from the late payment date
  • Foreclosures: 7 years
  • Collection Accounts: 7 years and 180 days from the date of delinquency on the original debt
  • Short Sales: 7 years
  • Bankruptcies: 10 years from the filing date; 7 years for Chapter 13 cases
  • Repossessions: 7 years
  • Judgments: If the judgment has been paid, 7 years. If unpaid, potentially longer
  • Tax Liens: 7 years after they are paid
  • Charge-Offs: 7 years from the date the account was charged off

However, if you have inaccurate, negative information on your credit reports, you can see some big changes relatively quickly to your credit scores. Dispute them!


What makes up a FICO score?

  • 35% is your Payment History
  • 30% is the amount that you owe
  • 15% is the length of credit history
  • 10% is the types of credit,  department store, gas, bank etc.
  • 10% New Credit


Category importance varies by person

For some individuals, who might not be utilizing their credit for a very long time will differ for someone who has a longer credit history. For some individuals one factor may have a considerable impact where the same factor might have a completely different impact on someone with a much different credit history. As time goes by and your history changes, so does the importance of any factor with change your fico score as well. It’s impossible to measure the exact impact of a single factor in how your credit score is calculated without looking at your entire report.

Payment History

Have you paid your accounts on time? That is what a lender wants to know. Having an occasional late payment will not kill your score, it is the overall payment history that he is interested in.

  • Accounts included in your payment history include:
  • Credit cards (Visa, MasterCard, American Express, Discover, etc.)
  • Retail accounts (credit from stores where you shop, like department store credit cards)
  • Installment loans (loans where you make regular payments, like car loans)
  • Finance company accounts
  • Mortgage loans


Public record and collection items

These records a considered serious events, although consideration is given to the age and amount of these records.

Negative items include:

  • Bankruptcies – will stay on your credit report for 7-10 years, depending on the type
  • Foreclosures
  • Lawsuits
  • Wage attachments
  • Liens
  • Judgments


Considerations on late or missed payments (“delinquencies”) and public record and collection items

FICO® Scores consider:

  • How late they were
  • How much was owed
  • How recently they occurred
  • How many there are

How many accounts show no late payment

A good track record on most of your credit accounts will increase your FICO® Scores.


What information is ignored and does not go into your score?

You will be surprised at what is ignored in your FICO Score.

  • How much money you make, you can have no income and still have a perfect credit score
  • Your occupation You could be a Doctor Attorney Construction worker it doesn’t matter
  • Where you live
  • Age
  • Race
  • Sex
  • Religion etc.
  • How much money you have in the bank
  • Interest rates you are currently being charged



Free Annual Credit Report

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting bureaus to provide you with a Free Credit Report copy, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s credit reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to credit reporting companies.

Included in your credit report is information on where you live or have lived, how you pay your bills, and whether there are any lawsuits or bankruptcies. Credit reporting companies sell the information about you to creditors, insurers, employers, and other businesses that use it to evaluate your creditworthiness, whether its, insurance, employment, renting and or buying a home.


Q: How can I get my free report?

The credit bureaus, have set up a website, a toll-free number, and a mailing address through which you can obtain your free credit report.

The website to visit is, call 1-877-322-8228. Or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. This is the only place that is authorized to provide a free report.

You have the option of ordering all reports or individually from each credit bureau. The law allows you to order one free copy of your report from each of the nationwide credit reporting bureaus every 12 months.

A Word of Warning About “Fake” Websites

There is only one authorized website to fill orders for your free annual credit report under the law — Other sites claim to offer “free credit reports,” “free credit scores,” or “free credit monitoring” are not part of the legally mandated free credit report program. In some cases, the product comes with strings attached. For example, some sites sign you up for a supposedly “free” service that converts to one you have to pay for after a trial period. If you don’t cancel during the trial period, you may be agreeing to allow the company to start billing fees to your credit card, be careful.

The FTC says warns “Some “imposter” sites use terms like “free report” in their names; others have URLs that purposely misspell in the hope that you will mistype the name of the official site. Some of these “imposter” sites direct you to other sites that try to sell you something or collect your personal information.”

The credit reporting companies will not send you an email asking for your personal information. If you receive an email, see a pop-up ad, or get a phone call from someone claiming to be from or any of the three nationwide credit reporting companies, It’s probably a scam. Forward any such email to the FTC at

Q: What information is needed to get my free report?

A: You need to provide your name, address, Social Security number, date of birth, any previous addresses within the last two years. Because of security concerns, credit reporting companies may ask you for some information that only you would know, like the amount of your mortgage payment.

Q: Why do I want a copy of my credit report?

A: Your credit report contains information that affects whether you can get a loan or not. It determines how much you will end up paying when borrowing money. Following are some reasons on why you want a copy of your credit report.:

  • To verify the information for accuracy, completeness, and up-to-date. This would be important before you apply for a loan or a major purchase such as a house or car, buy insurance, or apply for a job.
  • Guard against identity theft. This happens when someone uses your personal information such as your name, your Social Security number, or your credit card number then uses it to commit fraud. Identity thieves can open a new credit card account in your name. Then, when they don’t pay the bills, the account is reported to your credit report. Information like that can affect when you try to get credit, insurance or even a job.


Q: Is there situations where I might be able to get a free credit report?

A: If a company denies you credit or takes a negative action such as denying insurance credit or employment due to your credit report. You may request a free credit report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the credit reporting company. In addition, you’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, inclusive of identity theft. Otherwise, a credit bureau may charge you a reasonable fee for another copy of your report within a 12-month period.

Q: What if there are errors or inaccuracies in my credit report?

A: Under the FCRA, both the credit report­ing bureau and the information provider are responsible for correcting inaccurate or incomplete information in your report. To take full advantage of your rights under this law, contact the credit reporting company and the information provider.

1. Tell the credit reporting company, in writing, what information you think is not inaccurate.

  • Credit reporting companies must investigate any items that you dispute — usually within 30 days — unless they consider your dispute frivolous.
  • They must give all the relevant data you provide about the inaccuracy to the organization that provided the information.
  • The Company, must investigate, review the relevant information, and report the results back to the credit reporting company.
  • If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file.
  • Once the investigation has been completed, the credit reporting company must provide you the written results and a free copy of your report if there is a change. The credit reporting company also must give you written notification that includes the name, address, and phone number of the information provider.

2. inform a creditor or other provider in writing that you dispute an item. If the provider reports the item to a credit reporting company, it must include a notice of your dispute, if you are correct the provider may not report it again.

Q: What if a company or information provider does not or won’t correct the information I dispute?

A: If after an investigation does not resolve your dispute, you may ask that a statement of the dispute be included in your file and in future reports.

If you tell the information provider that you dispute something, a notice of your dispute has to be included whenever the provider reports the item to a credit reporting company.

Q: How long can negative information be reported?

A: A credit bureau can report most accurate negative information for seven years and in the case of bankruptcy for 10 years. There is no limit on criminal information or convictions; Information about a suit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, which­ever is longer.

Q: Can anyone get a copy of my credit report?

A: The FCRA is specific on who can access your credit report. Creditors, insurers, employers, and other businesses that use the information in your report to evaluate your applications for credit, insurance, em­ployment, or renting a home are among those that have a legal right to access your report.

Q: Can my employer get my credit report?

A: Your employer can get a copy of your credit report only if you agree and have given written consent.

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, visit or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters the Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Report Scams

If you believe you’ve responded to a scam, file a complaint with:




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