How to Quickly Fix Bad Credit & Instantly Improve Your FICO Score

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By johnhanlin
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Quickly Fix Bad Credit & Instantly Improve Your FICO Score

Recently I applied for a personal credit card with my bank and was rejected because I have "no active personal credit". This really puzzled me because I am debt-free and have a good amount of money in this bank. So I set out to get to the bottom of how you can be considered a credit risk by banks and other lenders EVEN if your credit score is very good or excellent.

Along the way, I learned a lot about how to quickly fix bad credit and almost instantly improve your FICO score (credit report score) that I believe can help a lot of people.

In this article I will explain the simple things you can do to fix your credit report and rebuild credit with lenders. I'll provide free links to resources that can help you RIGHT NOW!

Difficulty: Moderately Easy

Instructions

Things You'll Need:

Copies of your credit reports.

Step 1

The first step to quickly fix bad credit and instantly improve your FICO score is to GET COPIES OF YOUR CREDIT REPORTS and check them for accuracy. This should be done ASAP and repeated at least annually.

There are 3 major credit bureaus and you should get them all. To get them, I recommend FreeCreditReport.com (see link in Resource Section at page bottom.) For $30 you can get detailed credit reports and FICO scores for TransUnion, Experian and Equifax. The reason you need all three is because they are separate companies who collect and report your credit information independently. AND, it is reported that between 80-93% of all credit reports nationally have at least one error -- which could be damaging to your FICO credit score. Also, two of the credit bureaus could be accurate and the third could have incorrect information (with each one potentially having a different FICO score for you!)

WHAT IS FICO? It stands for "Fair Isaac Corporation" who created the first credit scoring systems for lenders and credit card companies. Essentially, it is a statistical analysis of various factors of a person's creditworthiness or likelihood that they will repay their debts. Today, many of the different credit agencies and lenders have modified versions of this, but are generically called "FICO scores" throughout the industry.
Step 2

Step two to quickly fix bad credit and instantly improve your FICO score is to understand what DAMAGES your credit score and also what IMPROVES your credit score.

Things that DAMAGE your FICO credit score:

* Late payments.
* No active credit. (Believe it or not, if you have NO debt, this is a BIG negative.)
* Total amount of debt (or credit) including mortgages, loans, credit cards, etc.
* How long you've had credit with each lender. (Longer is better.)
* How long you've lived at your current address. (Longer is better.)
* How long you've worked with each employer. (Longer is better.)
* Exceeding credit limits on credit cards and credit lines.
* Number of credit applications you've submitted. (Fewer is better.)
* Bankruptcies, collections, foreclosures, repossessions, etc.

Things that IMPROVE your FICO credit score:

* Correcting errors on your credit report with "credit repair dispute letters".
* Submitting "your side of the story" to the credit bureaus for any negatives on your credit report. (They must include this in your file for lenders to see.)
* Always paying on time. (Sign up for monthly automatic payments.)
* Opening and maintaining bank accounts in good standing.
* Use less than 50% of available credit. (e.g. If your credit limit is $5,000 you should keep your balance below $2,500.)
* Utility bills in your name. (Telephone, electricity, gas, etc.)
* Having a "mix" of credit types: mortgage, credit cards, personal loans, etc.
Step 3

To quickly fix bad credit and instantly improve your FICO score you should immediately submit CREDIT REPAIR DISPUTE LETTERS to the credit bureaus if you find errors in their credit reports. (This is critical!)

ALSO, for ANY negative you find on your credit report, you should submit a statement to be included in your report (this is your right by law) explaining your side of the story.

NOTE: Credit bureaus must correct errors brought to their attention within 30 days of your notification. ALSO, they must PROVE that their information is correct or they MUST remove the negative from your file -- which can instantly improve your FICO score!

In the Resource Section below, I have provided a link to a website that provides Sample Letters that you can use to advise the credit bureaus that there are errors on your report (see below). Also, for $37 you can order a step-by-step guide from RepairCreditUSA.info (see link below) which walks you through the process to quickly fix bad credit and instantly improve your FICO score and also supplies Letter Templates you can use. (This can save you $1,000's versus using a "credit repair company".)
Step 4

Finally, you can quickly fix bad credit and instantly improve your FICO score by TAKING ACTION NOW! These inexpensive tips and links can help you rebuild credit right away -- but noone else is going to do it for you.

BENEFITS OF GOOD CREDIT:

* Lower interest rates on your loans and credit cards.
* Lower insurance premiums (insurance companies run credit checks!)
* Buying a home.
* Renting an apartment (most landlords require good credit).
* Employment applications (many companies now run credit checks).
* Access to money when you really need it:
- Emergencies
- Business opportunities
- Etc.

NEXT STEPS:

1) Order your credit reports and check for errors.
2) Send dispute letters to credit bureaus if errors are found.
3) Send letters to credit bureaus explaining your side of the story for any negatives that appear on your credit report. (To be added to the report.)
4) Review Step 2 and start working on each item that can DAMAGE or IMPROVE your credit score.

GOOD LUCK!
Step 5

About the author:

John Hanlin is an Independent Investment Consultant specializing in high yield safe investments secured by real estate. He is a seasoned investor of over 25 years. Mr. Hanlin is the owner of the investors' website: www.JohnHanlin.com.

Comments

lighthouse1958 said

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on 7/7/2009 Thanks for letting the people know how to bring up their credit score. We should have very good credit bacause I keep a real good watch on it. But I forgot to send after my credit score. Sometimes I have to give them a call that's not right. If I prove it they will take it off. It is really very easy. The most important thing to me right now is keeping every TOM,DICK AND HENRY from checking me out. You would be surprised who all does this and we don't even know them. Now this makes me upset. 5* and rec.

lilolladystuff said

on 6/6/2009 Great article and wonderfully useful information. thanks.

lelai said

on 6/4/2009 best rating for you!

on 6/4/2009 john hanlin, its good to have you as a friend here on ehow. I have visited your website this morning for a little peek. I found it very interesting. would definitely share the website with everyone I know!