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How to fix credit, steps towards fixing your credit

The first step in fixing your credit is getting your hands on a credit report. You must identify all of the derogatory trade lines and reasons why your credit score is not higher. There will always be reasons why your score is not higher unless you score a perfect 850 which is very unlikely even for the most pristine credit files.

List of common derogatory items:

Late pay
Collections
Charge off
Bankruptcy
Repossession
Foreclosure
Judgement
Tax lien
Late Child Support Payments

List of common credit misuses:

Maxed out credit cards
Too many accounts
Not enough accounts
Too many inquiries
Too many new accounts
Too many accounts with balances

Most of the common credit misuses can be managed, identified, and fixed if the borrower is willing to put forth a little effort. If you do not have enough accounts then you need to go out and open some accounts and use them periodically. This is not a license to spend but to be used as responsible credit so that the repositories can have something to rate your credit profile. There are a couple of tricks to immediately boost your score when you have maxed out credit cards. One method is to spread the debt over to other credit cards as long as none of the cards go over 50% of the available credit. The other method is to have the credit card company raise your limit. If they double your limit then you will already be at 50% of your available balance. The optimal balance is 25%-35% if you have to carry the debt.

The derogatory items are a different story. If they are correct, then you will not be able to remove these items. However, we have successfully removed multiple accounts from single credit profiles where multiple creditors were reporting incorrectly. When there is incorrect information, you need to contact the creditor directly. This is going to take some patience. Take a deep breath and remember that this incorrect information is going to be on your credit profile for the next 7-10 years so it is important. You are going to have to prove that this information is incorrect. You will need to come up with supporting documentation or the creditor is going to have to provide you with their evidence. If they cannot prove that you are at fault, then they will have to remove it. I typically recommend talking to a manager as this usually speeds up the process. Once you have proven that the reported information is incorrect, you need to get a letter from the creditor that lists your name, the account number, that the reported information is incorrect, and that they will be deleting the incorrect information from their records and all three repositories. This is a very important part of the equation. The letter is the golden ticket and once you have it, the derogatory credit is as good as gone. You will need to put this into a file because even after it has been deleted, the creditors sometimes report it again and you may have to document the fact that this derogatory item is a mistake on their part again in the future. Mortgage Capital and Investment can get the derogatory account removed within 72 hours with our rapid reporting credit department once we have this letter.

There is also the traditional method of contacting Experian, Transunion, and Equifax and receiving your free report. Once you receive the report, you can dispute all of the derogatory items. I have seen correct derogatory accounts fall off with this method because the company no longer exists or they do not respond to the repository within 30 days. However, they are going to call the creditor to verify if the information is correct. This is why I recommend calling the creditor yourself and disputing it with them directly. The creditor is looking into a computer screen that usually has the same information as the repository. On some occasions, they can be completely reporting incorrectly but this is highly unusual.

Whichever method you choose, it is important to talk to someone before you begin and have them evaluate your credit profile. Sometimes old, small collections are better off unpaid and can hurt your score even more if they have a recent reporting showing that they have been paid in full. Mortgage Capital and Investment can help you with all of your credit repair needs. We have removed derogatory credit, raised scores, and made homeowners out of borrowers that would have never qualified before talking to us for years now. You may even qualify for better programs if your score is 15 points higher. Mortgage Capital and Investment will never place clients into loan programs if we believe that a little extra effort on credit repair can potentially save you thousands of dollars in the long run by raising your score. We are a leader in this part of the business and look forward to serving you.