Five Credit Repair Strategies to Improve Your Credit Score – Guest Post

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Your credit report may contain several different types of entries that drag down your credit score – collection accounts, past due balances, high balances, and perhaps even errors. When you’re repairing your credit, you should treat each negative account on your credit report differently. Here are four strategies you can use in credit repair.

Dispute credit report information. Perhaps the easiest way you can improve your credit score, even by just a few points, is to dispute any errors that are on your credit report. Federal law requires the credit bureaus to investigate your credit report disputes and remove errors from your credit report. If you don’t have success with the credit bureau, you can dispute the error directly with the creditor or business who listed the account on your credit report.

Pay for delete. You may be able to convince the creditor to remove a negative entry from your credit report, or at least report your account more favorably, if you pay off your account. Before you make your pay for delete offer, you need to have enough money to pay the account. Once you get an agreement from the creditor, you need to be able send payment quickly.

Send a goodwill letter. If you’ve already paid an account balance, you can’t use money to talk the creditor into removing a negative item from your credit report. You can ask for mercy though. Occasionally, creditors will remove a negative entry from your credit report on a goodwill basis. Try to send your request to an executive in the company rather than the general correspondence address. It’s harder to get the names and addresses of the higher-ups, but you’ll have more success if you put in the work.

Settle the account. Charge-offs and collection accounts with balances over $1,000 are difficult to pay in full. Alternatively, you can attempt to settle these accounts. A settlement payment is a percentage of the balance currently due. The creditor accepts the settlement payment and agrees to cancel the rest of your balance. Settling an account that’s already past due won’t damage your credit score much more. After taking care of the balance, you can start rebuilding your credit score.

Pay off a collection account. Collection accounts are one of the worst things you can have on your credit report. The first strategy for an unpaid collection account is to make a pay for delete offer. If you can’t convince the collection agency to take the account off your credit report or to settle for less than the full balance, you still need to take care of the balance. Paying the collection won’t remove it from your credit report, but your credit score won’t continue to be stung by the outstanding balance.

The ideal solution is to have negative information completely removed from your credit report. Disputing errors and sending pay for delete letters are the best ways to accomplish this. The next best solution is to settle the balance or pay it in full. As accounts age, they’ll hurt your credit less. After seven years, most negative information falls off.

Ed O’Brien is a seasoned writer on personal finance, specializing in credit repair.

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