“How do you clean up your credit report?” – This is a question that bothers most of the 35 million Americans with less than perfect credit. According to popular credit fixing myths, it takes years, financial effort and careful budget planning. However, there are much easier and smarter ways to fix your credit report. The only thing needed for quick credit repair is credit knowledge.
Here are 3 simple tips that will show you how credit knowledge can be useful in order to clean up your credit report.
1. Never pay your collection in full. Always settle for less
recovery to make the bank from a huge crowd of uninformed people with bad credit. Bailiffs literally pay pennies for every dollar you owe. If the debt has recently been charged off, they pay 5-6 cents on the dollar. If it is an old debt they pay 1, 5-2 cents per dollar. Old and out-of-state bills are usually sold for less than a penny on a dollar. If you’re into mathematics, you’ll realize that collection agencies still make a pretty handsome profit from you, even if you pay them 25% or less. And this gives a fairly good leverage effect during negotiations.
2. Debt approval
Under the FCRA (Fair Credit Reporting Act), all credit bureaus, collection agencies and original creditors are required to ensure the correctness of the debt at the consumer’s request. If they fail to provide the proper documentation, they are to remove the negative item from the credit report. Because most of your debt will be resold to various agencies down the road, most of them don’t have the proper documentation to approve their debt. Use this fact by the pressure collection agencies to delete the item with the record.
3. Payment for removal
This is the best you can do to increase your credit standing. A paid collection does not have to raise your score. On the contrary, it can lower it. A deleted set, on the other hand, will increase your score immediately. Negotiate with the collection agencies and promise them to pay only if you delete the item with the record. It sounds like a business proposition and remind them of the handsome profit they make of you.
The answer to the question “how to clean up your credit report” is simple: to learn more about the credit system and the various gaps in it. When you start thinking outside the box, you’ll be surprised at how easy credit repair is reality.