1. GET RID OF YOUR COLLECTION ACCOUNTS.Did you know that paying a collection account can actually reduce your score? Here’s why: credit
scoring software reviews credit reports for each account’s date of last activity to determine the
impact it will have on the overall credit score. When payment is made on a collection account,
collection agencies update credit bureaus to reflect the account status as “Paid Collection”. When
this happens; the date of last activity becomes more recent. Since the guideline for credit scoring
software is the date of last activity, recent payment on a collection account damages the credit
score more severely. This method of credit scoring may seem unfair, but it is something that must
be worked around when trying to maximize your score. How is it possible to pay a collection and
maximize your score? We can help you negotiate with the collection company’s and maximize your score, by removing all references to a collection account completely which will increase your score.2. GET RID OF YOUR PAST DUE ACCOUNTS.Within the delinquent accounts on your credit report, there is a column called “Past Due”. Credit
score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score.
If you see an amount in this column, pay the creditor the past due amount reported.3. GET RID OF YOUR CHARGEOFFS AND LIENS.Charge-offs and liens do not affect your credit score when older than 24 months. Therefore,
paying an older charge-off or a lien will neither help nor damage your credit score. Charge-offs
and liens within the past 24 months severely damage your credit score. If you have both charged-off accounts and collection accounts, but limited funds available, pay the past due balances first.4. GET RID OF YOUR LATE PAYMENTS.When you make the decision to retain FiCODOC we fight with the creditors and bureaus to delete the late payments on your credit report. Be aware that one 30 day late on a car payment can drop your score by 70 points or more.5. CHECK YOUR CREDIT LIMIT(S) AND EVENLY DISTRIBUTE THE BALANCES YOU ARE
CARRYING.Make sure creditors report your credit limits to bureaus. When no limit is reported, credit scoring
software scores the account as though your current balance is “maxed-out”.For example, if you know that you have a $10,000 limit on your credit card, make sure that the limit appears on the credit report. Otherwise, your score will be damaged as severely as if you were carrying a balance of the entire available credit. Credit scoring software likes to see you carry credit card balances as close to zero as possible. If it is difficult for you to pay down your balances, read the following guidelines to maximize your score as much as possible under the circumstances:o There are different degrees that scoring software can impact your score when carrying credit
card balances.o Balances over 70% of your total credit limit on any card damages your score the most. The next
level is 50% of your balance, then 30% of your balance.o In order to maximize your score without having to pay down your balances, evenly distribute
your credit card balances among all of your credit cards, rather than carry a large balance on one
credit card. For example, if you are carrying a $9000 balance on a credit card with a $10,000 limit, and you have two other credit cards with a $3000 and $5000 limit, transfer your balances so that you have a $1500 balance on the $3000 limit card, a $2500 balance on the $5000 limit card and a $5000 balance on the $10,000 limit card. Evenly distributing your balances will maximize your score.6. DO NOT CLOSE YOUR CREDIT CARDS.Closing a credit card can hurt your credit score, since doing so effects your debt to available
credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit
available is $20,000, you are using 50% of your total credit. If you close a credit card with a
$5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using
66% of your credit. There are caveats to this rule: if the account was opened within the past two
years or if you have over six credit cards. The magic number of credit card accounts to have in
order to maximize your score is between 3 and 5 (although having more will not significantly
damage your score). For example, if a card was opened within the past two years and you have
over six credit cards, you may close that account. If you have more than six department store
cards, close the newest accounts. Otherwise, do not close any at all.7. KEEP YOUR OLD CREDIT CARDS ACTIVE.15% of your credit score is determined by the age of the credit file. Fair Isaac’s credit scoring
software assumes people who have had credit for a longer time are at less risk of defaulting on
payments. Therefore, even if your old credit cards have horrible interest rates, closing those
cards will decrease the average length of time you’ve had credit. Use the old card at least once
every six months to avoid the account rating to change to “Inactive”. Keeping the card active is as
simple as pumping gas or purchasing groceries every few months, then paying the balance down.
An inactive account is ignored by Fair Isaac’s credit scoring software, so you won’t get the benefit
of the positive payment history and low balance that card may have. The one thing all credit
reports with scores over 800 have in common is a credit card that is twenty years old or older.
Hold onto those old cards trust me! Preparing credit is a slow and time consuming process.
Full knowledge of your credit profile and how it represents you to creditors and credit bureaus is
pivotal to full credit restoration success. Credit bureaus always advise individuals that they have a
right to dispute their own credit files, but when the rights of the Credit Bureaus slow you down~
you know where to ask for help.In conclusion, you can repair your credit if you hire a pro and listen to his or her professional advice.