The media and a lot of credit reporting companies have done quite an excellent job at promoting the notion that having a good credit score is the singularly most important thing in regards to their financial lives. Getting out of debt is secondary.  Saving for retirement is secondary.  It’s almost as if, when you finally have that perfect credit score of 720 or higher, then your life will magically become perfect.

The advertising is apparently working because even though everyone in the U.S. can order their credit report for free,still every year millions of people are going to services that cost them $36 a year to get their so called “free” report.

People have become obsessed about getting and keeping an excellent credit score. We hear these statements regularly on our financial helpline:

A caller who can’t pay their monthly bills because their debt payments are so high says, “I can’t go to credit counseling because I heard it will damage my credit score.”

A caller who is not saving in their 401(k) and missing out on the company match says, “I don’t want to pay off my credit cards.  I am keeping a balance to help my credit score.”

This makes no financial sense. People aren’t going to seek help getting out of debt – lowering the interest rate and possibly the balance owed – because it will hurt their credit score?  How is this helpful?  If people don’t get their debt under control, they may never retire. We’ll have a nation of people working into their 80’s with no savings but they can all come together and brag about their credit scores.

Don’t even get me started with the notion that carrying a balance on a credit card will somehow help the score.  First of all it is wrong and secondly, people are actually harming themselves financially – thinking that paying high interest on credit cards instead of paying them off is a good financial strategy.

Don’t get me wrong, having a good credit score has value; it can save on the cost of borrowing money so it is helpful to have the best score possible.   Just make sure you are basing your credit strategy on sound information – not common myths that get you nowhere.

Let’s examine some of the biggest credit myths that can lead to disaster:

* Assuming if you pay your bills on time, you don’t have to do anything else.

Paying your bills on time accounts for about 35% of your credit score but there is another 65% which includes amount owed (30%), length of credit history (15%), new credit (10%) and type of credit (10%).  Consider all of the other factors.

Also remember that there may be errors on your credit report so if you don’t check it, you’ll never know and your score will be affected.  According to Deborah McNaughton, author of The Get Out of Debt Kit, 80% of credit reports have errors (as cited by Bankrate.com).  Many of the erroneous reports had missing information that may boost a score, such as missing a revolving account in good standing, or miscellaneous incorrect information such as an incorrect birthday.

Check your credit report.  You can receive a free report from each of the three credit reporting agencies once a year at www.annualcreditreport.com.  Credit reports are unique to Social Security numbers, so if you are married, you may want to stagger your requests with your spouse every six months.

You can also request your actual score for a onetime fee (which is less than $15 through most credit bureaus).  Most credit monitoring services will provide your score for free when you sign up for their service.

* Assuming when you divorce, your accounts automatically divorce with you. They don’t.  If you have a joint account and one of the parties on the account is late, you are both late.  With some types of loans, such as a mortgage or a car loan, the lender may not accept a letter asking you to be removed from the account after a divorce even if that property is going to your ex-spouse.  They will need to qualify for the loan on their own before you will be removed from the account.

Take this into consideration because if they don’t refinance, and then have late payments, you may find yourself with some credit issues.  When possible, close all joint accounts and refinance any debt separately.  If it is not possible, maintain some type of control, whether it is an escrow account or at least access to information to make sure the accounts are paid in a timely manner.  Don’t assume.  Also see the last point about closing accounts.

* Avoiding consumer credit counseling because it will hurt your credit score. For someone with serious debt, working with a not-for-profit credit counseling agency to develop a debt reduction plan and get out of debt permanently should take priority over credit scores.  Credit counselors will work with your creditors to try and reduce your monthly payments, or settle your debt altogether.  Debt settlement doesn’t affect scores as badly as you would think.  In fact, many people don’t realize that late payments affect scores more than a debt settlement.  Here is an example of how a debt settlement can affect credit scores, and how that compares to late payments.

* How Mistakes Affect FICO Scores. A late payment hurts your score more than a debt settlement if your score is in the 680 range; it only significantly pulls it down if you are in the 780 range.  Let’s be honest here, people ready for credit counseling probably don’t have the highest scores anyways, and the bottom line is credit scores are fluid – they can be rebuilt. According to Credit.com, a debt write off can stay on your credit report from seven to ten years, but as the information ages, so does its negative impact.

* Making late payments aren’t that big a deal. According to FICO, a 30-day late payment can affect your score by as much as 110 points. Late payments can have a huge impact on your credit score causing it to drop like a stone.  This is one disaster that is relatively easy to avoid. Simply set up all of your accounts with an automated minimum payment schedule from your checking account.  This way you’ll never miss a payment.  You can always pay additional amounts through online banking. Set yourself up for success with this one because it can be an easy one to miss and makes a significant impact.

* Closing accounts to clean up your credit. Closing an account may be a good idea if you only opened the account to get a discount on merchandise or have too many credit cards which is causing confusion, but it won’t clean up your credit or help your score.  In fact, it can hurt your score when the account you close has a long credit history – especially a good one.

Your credit history accounts for 15% of your score, so in making decisions which cards to keep and which ones to close, keep in mind how long you’ve had the account open and close the most recent ones first.

Are credit scores important?  Yes, but they are not the “be all and end all.”  Now that we’ve dispelled some of the biggest myths, consider what the “be all and end all” is for you.  What are your biggest financial challenges and concerns?

Our latest research shows that less than 18% of employees feel they are on track for retirement.  Are you part of the 82% that isn’t? Do you have a personal net worth statement and is it going in the right direction?  The point is when you focus on the important financial issues, you have a chance to meet your financial goals.

Clean up your credit if you have to, and do your best to keep a good credit score, but let’s not go overboard and lose sight of everything for just one number.

Before you can write your credit repair dispute letter, you must first a copy of your credit report. You can get this for free from one of the three credit agencies namely Equifax, Experian or Trans Union.

When you get your copy, review it carefully and check to see if there are any errors. Take note of each one and then being composing your letter.

Since the credit agencies gave you the report, the errors you want to dispute need to be addressed to them first. Since the report from the three credit agencies may be different, it will be a good idea to send each one of them a copy so everyone is on the same page with regards to your present credit standing.

Don’t make the mistake of putting all the errors into one letter. It is best to dispute each claim one at a time in a separate letter so the credit agency doesn’t think that you are simply pulling their leg. You don’t have to wait for a reply before sending another one it’s just that each claim must be handled delicately so a proper investigation into the matter can be done.

You should give the credit agency time to reply to the claims you have disputed. This is because the credit agency will conduct their own investigation before sending you a reply. To make their work a little easier, send supporting documents when you write the credit repair dispute letter.

It may not be a big deal but when you write a letter to the credit agency, consider writing it rather than typing this and printing it on paper.

To prove a point, it is best to use strong words like erroneous, outdated, misleading or unverifiable. Remember, you don’t have to explain in detail why you are complaining because the supporting documents and an investigation will make the truth come out.

For people who have never written a dispute letter before, there are some samples which you can copy online. Just change the name, the date and a few other details because your concerns are different from what was laid down as a guide.

When you’ve finished writing your credit repair dispute letter, mail it using the postal service and just wait. Normally, it will take about 2 weeks to a month before they receive it. If the investigation has shown that you are right, you will receive a new credit report 2 to 4 weeks later with a higher credit score.

Since 1970, the Fair Credit Reporting Act of FCRA has been in place to give people the opportunity to dispute the claims that are printed on their credit report. If you feel that the report is false, don’t just accept it but take steps so this can be changed.

Now that you know how to write a credit repair dispute letter, get a copy of your credit report and then review it thoroughly.

If it happens that your credit score falls below the minimum, don’t panic because this can be changed. Never for one moment should filing for bankruptcy become an option because this will be on your record for 10 years or so.

Repairing your credit may not be as bad as you think if there happens to be any mistakes on your credit report. You can check that by getting a copy for free from one of the three credit agencies namely Equifax, Experian, and Trans Union. You can request a copy simultaneously or get one at different times of the year.

Once you have it, review if there are any errors on the document. There are instances that one report will say something different.

If you know for a fact that a certain issue has already been resolved, send a request to have this changed together with a letter and the documents that prove the credit report mistakes hould be removed from your record.

But what if the credit report is real and accurate? What then? Well,really, the only thing you have to do to repair your credit score is to pay it all off. If you are having a hard time due to the size of the debt, get yourself help from a credit counselor who can act as your negotiator and help find or create a debt consolidation package for you.

Your debt consolidation package has to be placed in writing as it signifies a legal agreement between you and your creditors. . This document will save your a** should there be any kind of problems in the future, like if the creditors decide to try and void the agreement.

Once your debt consolidation package is in place, it is time for you to come up with the money and that usually going to mean cutting down your expenses for the moment.

If what you are saving isn’t enough, you may actually need to make some hard choices. Like selling off certain valuables especially when you’re unable to get a loan anywhere. This may be one of your only alternative.

When you have finished paying off your debt, and that could take months or even years, make sure you get a settlement letter from them and send a copy of it to the credit bureaus so they can update your credit report.

There are lessons to be learned once you have successfully repaired your credit.

First, you want to keep an eye on all your expenses. If the credit given to you is quite big, resist the temptation to max it out because you’ll mostly end up in the exact same position you just got out of.

Second, while most creditors will allow you to pay a minimum, whatever is left grows because of interests so you are not doing yourself any favors by not paying this amount in full. Pay as much as you can, every time. If you can manage it, pat it all off before the payment is due even.

Third, if this is something you can’t do alone, don’t be ashamed to ask for help because there are counselors ready to help you out.

Fourth, pay all your bills on time and in full whenever possible.

Credit repair can be avoided if you play it smart. Creating a budget and sticking to it for the most part is a great start. Once your credit report is back to normal, you want to keep it that way.

When your credit score dips down to 600 or below, it’s time to do some repairing to get it back up. To give you an idea how this gets calculated, everyone starts out with a good score but the moment you are late on a payment or a mortgage, this is going to have an affect on your credit score.

Does this mean you’ll be unable to get your loan? In some cases no but you will probably get an interest rate that’s higher compared to someone who has a good credit score.

Pretty much the only way you can fix this is by paying off your old debts and making sure that it does not happen again.

If you think you can get this done overnight, think again! because the amount of money you owe might be too big and most people who have this problem are only able to get back in financial shapee paying it after several months or even years.

Should bankruptcy even be an option? Never because your record will be kept on file for 10 years and you can’t escape it.

Repairing your credit is in a way like repairing your car, you  need to find out what’s wrong first. You do that by getting a copy of your credit report. You can get a copy of your report form any of these credit agencies Equifax, Experian, and Trans Union.

When your credit report is in your hands, be diligent in reviewing what’s on it. If you know for a fact that a certain issue has already been resolved, immediately send a letter to that credit agency together with the supporting documents so your credit report can be corrected.

For those who have an outstanding balance, the case is different because you need to pay for it before you can get your settlement letter and this should also be sent to the appropriate credit agency for filing.

Until that happens, you have to find some way to pay for it. A debt consolidation loan can get you better terms as it’s designed to buy you some time and help you to start over with a single payment that’s easier to handle.

Surprisingly, credit repair can be as simple as borrowing money since your credit score may not improve unless you actually apply for a loan. You don’t have to borrow a lot since a small amount like $500 is enough to get the ball rolling. Again, just make sure this is paid in the agreed upon time and paid in full.

After reading this, you already have a clearer picture as to why credit repair is needed. Could it have been avoided? The answer is likely yes but it is too late to think about that now just remember the important thing to do is focus on correcting the situation.

Credit repair may be simple or complex and if you can’t do it alone don’t be afraid to ask help from a credit counselor. Sometimes using one is the best answer to your situation.  It won’t be long until you will once again your credit will be in good standing and you can once again find yourself with a line of credit.

So you don’t need credit repair again, monitor your expenses and do not spend beyond your means. Maybe even think about creating a budget to live by.

So this article might just help you to avoid the mistakes that may lead to a bad credit score, and by that, provide ways to easier and faster credit repair.

The word “quick” is a pretty relative word here and really depends on where you’re looking at it from. It may depend on the situation that each individual is into as of the moment. For some people, thirty days is quick, but for some, it’s a whole lot less.

Your situation may include all the damages that were inflicted, and their effects. Your financial standing, your efforts to resolve these problems, as well as your moral fiber are all considerations that are to be taken account.

You should always remember that in resolving your credit problems, there is always hope. Here are just a few of the ways you may resolve your credit and remove all negative items that have created your bad credit:

1. First and foremost, you should always remember to pay your bills on time. Thirty five percent of your credit score is based on your ability to pay your bills before they fall due. Being always late is going to cause you to lose as much as 100 points on your credit score.

Thus, this first step is pretty much imperative for you to keep on top of because it can either make or break your attempt to repair your credit standing. You should always do everything in your power to settle all your bills on time.

2. Try to be aware of what you have on your credit report. If you are not yet insolvent, or something near that, you should refrain from getting free annual credit reports. Some experts believe that these free reports are tied to a technicality that ends up increasing the time for reinvestigation when there is a dispute. What that means is that instead of taking thirty days, the time is going to get bumped to forty days.

3. You need to raise your credit score. By simply increasing your credit score, your repair process can be accelerated. You can raise your credit score by cutting down your existing balances and debts.

4. Make sure that your credit reports don’t contain any inaccurate information. These mistakes can hold back your ability to get credit. Be vigilant of these details, some debt collectors may actually use this dirty tactic against you. Once you have seen inaccuracies, you should report them to the credit bureau in writing.

If the mistake was committed by the furnisher, then you should inform them as well because it is their responsibility to correct such mistakes. Remember as well if errors were made by any of your collectors, then a report against them should really be submitted.

5. You may also try to dispute entries made by credit bureaus because old debts are not worth verifying anymore. However, if you try this kind of defense, you should not rely on dispute letters found on the internet. It would be better if you write your own letter. This may show how legitimate your claim is.

6. Lastly, you should not dispute your open accounts for these are the ones which will help you build up a good credit history. Just make sure that you pay them on time.

Please leave any comments or questions you have on credit repair and we’ll make sure we get them answered.

But how do you do that? The first step is to find out what is written on your credit report. Is everything there correct? Should there be discrepancies, send a letter to the credit agency together with the supporting documents. That way, they can make the changes and this will be reflected on your credit report.

If there is nothing wrong with the credit report and you have a problem paying your creditors, it is best to inform them at once so they know what is going on and a deal can be struck. To them, they would much rather that you pay a certain amount rather than nothing each month.

This is because even if they can take the matter to court and they do win, you will still not have enough money to pay for what you actually owe them and in the end, they do not get anything out of it.

The agreement you struck has to be made in writing so you have something to show in your defense, should any problems arise in the future. Since they will keep their part of the bargain, just make sure you do your part.

To do that, you need to create a budget and make sure you are saving enough money to what you agreed to pay. You may have to cut down your shopping expenses and eating out for quite some time. Whatever you earn should be used only for the essentials like bill, gas and groceries.

Minimize the use of your credit card. As much as possible, pay for items with cash. If you need to use your credit card, monitor how much you can only spend monthly so the money you already owe does not get any bigger.

If you have more than 4 credit cards, try cutting them down to only two. The ones which should go are the ones that have high interest rates and those that were less than 6 months old.

At the same time that you are paying off your debt, it will be a good idea to get a secured credit card to continue building up your credit history. This type of card is unique because you already have the funds in the bank and this will just be deducted every time this is swiped in a card terminal.

Since banks will not give you a loan when you need cash, join a credit union.

You will soon have a good credit rating if you are able to stick to the plan for the next few months or years. Remember, your payment history has the heaviest impact on your credit score.

Credit repair is being able to pay what you owe gradually is much better than filing for bankruptcy. This is because it will be on your credit for the next 10 years so why put yourself in that situation when you can do something to change it now. All it takes is some will power and guts to face it head on.

Remember, you put yourself in this situation so find a way to dig yourself out.

If you think this problem is only in the US, think again because the same situation happens in other part of the world.

Credit card consolidation is very simple. You combine all the debts you owe from various creditors so you end up paying only one creditor monthly.

There are many benefits for credit card consolidation.

First, you get to pay off your debt at lower interest rates than those that are already prevailing in the market.

Doing so will re-age your account. This means that your account is current and active as long as you keep making the payments that you agreed on.

While most card companies charge you fees for being late on your payments, the credit card debt consolidation program waives that so what you will only be paying what you actually owe.

Lastly, the debt consolidation plan buys you time so you have the choice whether to finish paying in a matter of weeks or months.

When you are able to consolidate your credit card debt, the next step is to come up with the money to pay it off. You can try reducing your expenses, asking for a raise, getting a second job or selling some valuables.

So do you need to apply for credit card consolidation by going to a bank? You can of course do this through a bank but there are private and non-profit organizations that offer similar services. You just have to find the right one to work with and then cooperate with them.

When you are looking for an organization to work with, make sure they are legitimate because some of these places are scams. This isn’t good and you surely don’t want to fall for that because you are just wasting your time and more importantly your money.

Once you notice that the money you owe is getting smaller, you are already on the right track and it won’t be long before you have finally been able to do some credit repair.

There are a few things you can also do to improve your credit score. You can open a new line of credit and if the major credit card companies will most likely deny your application, get a credit card offered by supermarkets or groceries and those offered by banks.

Don’t forget to pay your bills and other expenses on time because all that hard work you have done will go to waste if you miss a payment.

The amount of money you owe to creditors took months to grow so don’t be surprised if it takes awhile before you are finally debt free. Remember, you put yourself in this situation so the only person to blame is yourself.

Credit card consolidation is just a part of credit repair. Once it is in play, honor your commitment because that is the only way that your credit score is going to improve and you will once again have good standing with your creditors.

Leave a comment below to let others know what you think about this idea and if it’s helped you to repair your credit.

The first step is to know how the bad the situation is and the only way to do that will be to get a copy of your credit report. You can get this for free by getting in touch with one of the three credit agencies namely Equifax, Experian, and Trans Union.

If it just so happens that there’s one or more discrepancies in your credit report which you know for sure has already been resolved, sending a letter and the supporting documents is usually all you’ll need do to fix it.

But, on the other hand, if the credit report is correct, credit repair can only be done by paying off the listed item. It will be a good idea to actually talk to your creditors and ask if you can strike some sort of deal which will allow you to pay the said amount in staggered terms.

If they agree to this, lucky you, make sure that this agreement is written on paper so you have some proof and something to fall back on should they ever decide to change their minds. This has been known to happen, so prepare yourself.

Should you have any problems when talking to your creditor, don’t give up hope and instead, hire a credit repair company to act as your mediator. Talking to professionals has a number of benefits and two of them happen to be lower payment and interest terms. Not such a bad thing.

Credit repair takes time, and since money is always the issue, be prepared to make certain sacrifices along the way to reduce your expenses. If what you are earning is not enough, you may have to actually sell off some valuables and assets.

People who have outstanding loans must still be able to pay for other things like mortgage and other bills. The scenario itself is like fighting a campaign on a number of fronts but you have no choice because failure to miss other payments will only make matter worse.

No one said that when you are undergoing credit repair, you cannot use your credit card. In fact, you can still use it, only just make sure you do not max it out like before because your total debt compared to your total credit makes up 30% of your credit score.

Once you are able to improve your credit score, keep up the good work! At the same time, apply for either a department store credit card or a secured credit card. Either of which can also help you to improve your credit score

Filing for bankruptcy is never an option with regards to credit repair. This is because it is like taking a nose dive when your record will be kept on file for 10 years and during this time, interest rates will continue to pile up and the amount of money that you owe only grows.

The credit repair tips mentioned are pretty easy for anyone to follow. Once you start paying off your debt, make sure you are able to do it so you can once again be back in the green.

Is credit repair easy? Not really because it really depends how much you owe the creditors. Some individuals owe a thousand or two while for others it is quite bigger and that is more of a challenge.

So analyze your situation, take the appropriate steps in credit repair and make sure this does not happen again.