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One of the most difficult obstacles people have is understanding how to raise their credit scores.  There are many ways to go about this, but where do you begin?

Do you settle collections?  Do you pay off your credit cards and close them?  Do you add yourself to another persons good credit account?

All of these questions will probably go through your mind, and you need to be careful about what you do.  Because you can make a mistake and it can not be “undone”.

One of the first things I recommend is sign up for credit monitoring online.  This will give you access to all 3 credit reports from TransUnion, Experian, and Equifax.  It will also track your scores monthly.  So as you make improvements, you can see those reflected in your scores.

I personally recommend Privacy Guard or Credit Check Total .  They are both user friendly sites that have designed their credit reports to be easy to read and understand.  Their monthly costs are low (around $15-$20/mo.).  Some sites will charge from $30-$60 per month for the same information.

Once you have your reports, go through the account information and also review the summary at the end of the report.  It will highlight the positive and negative issues with your credit.  This is the starting point to raising your scores.

There are 2 components to your credit scores that effect them the most, payment history and credit card balances.  These alone are responsible for 65% of your FICO scores.


jason hall

FICO score components

The most immediate control you have over your credit scores are the balances on your credit cards.   It’s advised to carry no more than 30% of a balance/limit over a billing cycle.  Once you carry larger balances and they are reported to the credit bureaus, it begins to lower your scores.

Payment history is actually a pretty broad category.  This includes on time payments and late payments, but also includes collection accounts, judgements, bankrutpcy, tax liens, and charge-offs.  This can be the more challenging area to clean up.

Collection accounts are typically where your next focus should lie.  Collection accounts that are paid, still effect your scores as they are on the report.  It’s best to remove those collections through a dispute process.  Paid collections have a 80% chance of deletion through my credit repair process.  So it is almost always advised to settle your collections.  I say “almost” always, because you need to note when the account was last re-aged to the credit bureaus.


What is re-aging of a collection?

This is refreshing the collection to report as like it was a new collection account.  The newer the account, the more of an impact to your scores.  The collection companies do this to keep your scores low to motivate you to settle.

What’s the best plan to settle your collection?

I’d recommend looking at your budget.  If you have $2,000 to settle collections, I recommend settling the most recently re-aged, the lowest dollar amount, and as many accounts as you can that will fit inside of your budget.  It is NOT the dollar amount that effects your scores, it’s the collection account as a unit.

How much do you settle your collection for?

Understand that the collection company purchased the debt from the original creditor at a discount.  Sometimes 10%-30% of the original amount, and try to collect in full.  The difference is their profit.  Knowing this, offer 40% of what’s owed.  You’d be surprised at how much money you can save.  Also ask for a deletion of the account.  Some will agree to this, but not all.



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