Credit scores vary in range from 300-850. In the past, I have personally seen scores in the low 400’s which is pretty bad. Having said that, any credit score can be fixed. Even if your score is in the low 300’s, you can improve it over time, but let me be clear…It will take you at least a couple of years and that’s with extreme discipline unless you hire professional help. It’s already a slow process and there’s just too much work to do.
Here are the necessary steps to improve your credit score:
Hire a credit repair company – With a credit score between 300-500, there is no need to go at it alone by attempting self credit repair. You are long past that point. I recommend “The Credit People” and have blogged about them in the past due to how effective they were in repairing my own credit. Their complete service is $419 if you pay in advance, while the industry average is $1200 a year.
Pay off any remaining debts – “The Credit People” do excellent work, but no company will guarantee 100% removal, so just assume that you will need to do your part in cleaning up any residual debts. You should first initiate a “Pay for Delete” (PFD) agreement in which you offer to pay the creditor a lesser amount of what is actually owed, in exchange for the removal of the debt from your credit report. I offer a free sample PFD letter on my blog that is available upon request.
Make all future payments on time – Even though you’ve hired professional help, you must still do your part by keeping up with all future payments and make a commitment to never be late again. This is a very important step for obvious reasons, but the biggest being that creditors place a heavier weight on how you’ve paid your debts lately, rather than how you’ve paid them in the past. This strategy will put you in a better position to apply for new credit in the future.
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