Ahh, credit!!! One must love the fact that people will give us credit while we are young and full of dreams!!! You know the days, if you aren’t in them it’s quite likely you have been! My husband and I both made a series of mistakes when utilizing credit in the beginning and we are paying for it!!! (Both literally and figuratively!!!) Despite the fact that we have spent the last 5 years paying bills on time and not obtaining more debt, our credit was still too low to manage anything with. We finally got to the point where we were ready to take that giant home ownership leap, and we got the lovely and inspiring message ‘you’ve….uh…..got a lot of……uh……negative things…..on……your…..uh…..credit…..’ No amount of honesty or good intentions was getting us those keys!!!
So, here we are, lots of research later and we are almost there. I can TASTE the wonderful taste of home ownership!!! We still have a little to go, but not near as much as before and now it doesn’t seem like something we will never achieve!!!
All of that was said so that I could give you a few ‘tips’ and form letters to improve your credit once you’ve ran it into the ground. Make no mistake, it will still take time, but it won’t take 7 years! I was so frustrated in doing research and only finding ways to raise your credit BEFORE you’ve ruined it! Honestly, if I had thought to look up something like that all those years ago, I wouldn’t have needed it!!!
So, in hopes of saving you my headache, here goes:
1. Get a credit report. There are legitimate sites where you can get each report free once a year. Don’t PAY for that report!!! Also, you have three reports: ONLY get one!!! You’ll want to wait a few months so you can re-check your credit without spending the money to see if it has improved. I suggest printing it out without your social. You know what your social is, no need to put it on even more paper!
2. Keep your current bills up to date. If you can’t afford a bill, CALL THEM!!! They don’t want to send it to creditors if they don’t have to, they lose money that way. That is why they are willing to work with people. Don’t get me wrong, they try hard not to be too helpful, but they will help.
3. Go through your report, ensure that each item on the list is YOUR DOING!!! Identity theft is a very popular crime these days!!! Any charges that you are not familiar with, call and get information. Make sure it’s yours!!!
4. After verifying that all things on the report are your own, breathe. Just breathe!!! We all make mistakes and learn the hard way, this isn’t the end of being able to utilize your credit. Just start working on it!!!
5. Here’s where the work begins so the suffering can end!!! Current debt: stay on top of it. Pay off balances as quickly as you can. There are many ways to save money and when we stop and look at it, there are many things we can cut out of our budget!!! Which reminds me, budget!!!
6. Pay for Delete: All of the accounts you have that are in collections, start sending pay for delete letters. The letter will follow. Make an offer for less than what you owe, providing they respond in a certain amount of time and you pay that amount in a certain time frame. Don’t send the letter until you have the money, and when you do send it send it certified so they know you are serious and you know whether or not they’ve received it! The idea behind this is when they agree, and you have it in writing, you send the money and you are done with them. They will have 30 days to take it off your credit. Just make sure you promptly pay it!!!
7. Goodwill letter: Also to follow. A goodwill letter is basically to plea for companies to remove late payments and ‘paid after charge offs’ from your credit. One of two things can happen here: they can say no and nothing changes OR they can have some mercy and remove it. Worse case scenario: you are out the cost of printing and mailing the letter!
Pay for Delete
Your City, State Zip
Collector’s City, State Zip
Re: Account Number XXXX-XXXX-XXXX-XXXX
Dear Collection Manager:
Please forward your agreement to the address listed above.
Tips for Sending Your Pay for Delete Letter
- Send the letter only if you have the ability to pay the full amount listed as soon as the collection agent agrees to your offer.
- Send the letter and your followup payment via certified mail with return receipt requested.
- Make sure you keep a copy of the letter for yourself.
You can use this to get your credit score free! My suggestion is to get one (you can get three per year total), work towards fixing these, THEN after about 4-5 months, get the second to ensure the old stuff is taken off! Good luck!