Recession Based Credit Repair

Credit Clean Up: Add Starter Accounts

Personal Finance Made Easy has been getting many questions on credit repair and credit cleanup. Therefore Personal Finance Made Easy has been doing alot of research lately on credit repair. Credit clean up can be a difficult thing to do, but if you take the right steps toward cleaning up your credit you can be on your way to a brighter, more secure financial future. One of the best ways to work on building a strong financial future during your credit clean up process is to add or refine the starter or good accounts you currently have. Starter accounts are those smaller credit or loan accounts that people with no credit are usually able to get in order to start building credit. These are often in the form of jewelry, store accounts and tool accounts. They are smaller in limit and don’t require the high level of credit that other loans, like credit cards and home loans, do. These are good accounts not only for those just starting out in their credit journey, for also for those recovering from bankruptcy and other financial set backs.

If you already have some of these accounts, you need to take a hard look at them and make sure they are not in trouble. If they are, you need to do what it takes to get them current and the balance paid. While, some accounts on your credit report you will want to close as you pay them off, like high interest rate credit cards, starter accounts you should leave open. The open, active account with a current paid balance will reflect positively on your credit report and through your credit score. You do want to use them occasionally to keep them active and in good standing, but don’t go crazy or charge more than you can pay off in a month or two. These accounts generally have lower interest and small monthly payments, but don’t let the small payments entice you into getting in over your head. If it’s a jewelry account, buy your loved one some $100 earrings for a gift and pay it off within the next thirty days. This will show you can use the account responsibly and show future lenders you can handle a loan and the responsibility that goes with it.

If you have no starter accounts, then take the time to look for one that will fit well with your current credit situation and your spending habits. If you love tools, then a Sears card should NOT be your first choice because of the temptation to max the card out and get into trouble. Instead, go for something you are only likely to use occasionally and work within the same guidelines as mentioned above when using the account. Some of the store cards have gotten more stringent in their guidelines and you may meet some resistance when looking for one. Try not to go to every store there is and apply for a card because the more times your credit is checked in a short period of time the worse it looks on your credit report and could cause the reporting agencies to think there is some form of identity theft going on.

Starter accounts are a great way to build your credit and help it recover from hard times. Take the time to research the types of starter accounts available and open only one or two and stick within the parameters listed for the best results. Changing your spending habits can be hard, but the benefits for the future are many.

Dispute Incorrect Information from your Credit Report

When you are working to clean up your credit the job can seem overwhelming and too much to handle. To make it easier there are a few simple ways to go about the process that when used together form the best results and more peaceful you. One of the steps to the process of credit clean up is to inspect each of your credit reports and dispute any incorrect information you find. This is vital to not only maintaining good credit, but is also important when cleaning up your bad credit and preventing and catching identity theft. Ideally, you should purchase your credit reports once a year and go over them with a fine tooth comb and dispute anything you find to be incorrect.

There are three major credit reporting agencies Experian, Equifax and TransUnion. They all have a web site with ordering instructions on how to pay for and download or print your credit report. There are also sites that offer all three of the reports at once and other services as well. Be careful when considering these sites as they can be a little shady and want you to join as a member to receive their services or special prices. It’s best to stick with ordering and printing your reports straight from the source.

Once you have your credit reports take a few minutes to print each one and staple them together to keep them from getting mixed up. While, you will be going through them separately, you will want to compare the information between them as well to check for discrepancies. Once you have everything in order, find a comfortable place you can concentrate with a highlighter and a pen to mark things of question you find.

Generally, the credit report is separated into different categories starting with your personal information, residential information and employment information. Though the focus of a credit report is one the accounts, you need to look through these areas to check for name, address and employment errors because these could be a sign of identity theft. Next, move on to the accounts, collections, judgments and other sections you need to look for accounts that you have paid that are not marked as paid. Incorrect balances, accounts and other information. Not only do you need to mark the items you feel are incorrect, but then you will need to go through your financial records to find receipts and other levels of proof to show the information is incorrect. This is your burden to prove the information on the reports are not correct and you may need to contact the companies the accounts are through to try and find out their side of it too, in order to get the information changed to reflect the right information.

At the end of all credit reports is the dispute information and procedures that each credit reporting agency uses. Make sure to following them down to the exact letter in order to keep your claim from getting thrown out. The creditors have a time frame to look over the dispute and have up to ninety days to make the change and then the credit reporting agency can make the change or take action for you. It does take some time to get wrong information corrected, but the time is well worth it and you could be saving your self money and interest rates in the future.

These Articles are excerpts from our E-Book on “Recession Based Credit Repair”.

It is available by clicking the link above.


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