How to Fix BAD Credit Scores As Quickly As Possible02-13-2020 Home » Money » How to Fix BAD Credit Scores As Quickly As Possible
In a pickle with your credit?
Well you're not alone as VantageScore says that there are about 220 million scoreable people and 68 million of those people have a 601 credit score or lower which means 30% of people have bad credit...
Before we go ANY further, you need to know that the easiest way to get your credit scores up is to find someone who already has 800+ credit scores and have them add you as an authorized user on a card of theirs.
Problem is, most people don't have someone they can do this with which is why today I'm going to show you how you can actually FIX your bad credit scores.
Little bit of background on me: I'm a mortgage lender in Arizona so I see 3-5 new credit reports every single day. You could say I've been around the block when it comes to credit.
While I love working with 800+ credit score indivduals, I seem to spend 80% of my time working with clients who have low credit scores. So because of that, I've learned a thing or two because I've seen a thing or two.
If you have bad credit, you won't be able to get a home loan (or if you can, you'll have a terrible interest rate). It's super important to spend the time and money on increasing your credit score because it'll save hundreds of thousands of dollars over the course of your lifetime (interest rates on car loans, mortgages, credit cards, etc.).
If you want good credit scores, you have HAVE to do one VERY important thing. And that's to actually get a REAL credit report to see what exactly is bringing your scores down.
If you don't have a full credit report, you're literally going into this whole situation blind as a bat. Do yourself a favor and don't use credit karma or any of those other BS services you see online. Those platforms are sooo far off of what your scores actually are and they don't give you accurate information when it comes to your report.
Just go to AnnualCreditReport.com and get your FREE credit report. By Federal Law you are allowed 1 free report every 12 months. So go there and get one right now.
Once you have your report, you can actually sit down and review it to game plan how to get your scores up as soon as possible.
Now there’s really only 2 possible situations for having bad credit.
1 – You just don’t have any active credit lines. Like you don’t have any credit cards and you don’t have many loans. You just don’t exist to the credit bureaus. So if you get your report and see basically nothing on it… then that’s easy. Watch this video on how to actually build credit with No Credit.
2 – Odds are though.. about 95% of people have LOTS of things on your credit report which is what’s bringing your scores down. We need to clean it up but here’s things you’ll see on there- (and we’ll talk about what you can do about each in a bit)
This is what hurts most individuals. So if you make a payment 30 days after the due date… you’re going to get a 30-day late. Then if you still don’t pay… you’ll get a 60-day late… then a 90-day. The Late Payments problem is like a snowball effect. As the problem continues down the hill it gets bigger and bigger and bigger. So handle these ASAP.
If you have a foreclosure or a bankruptcy, it’ll stick on your credit report for 7-10 years which is tough and potentially problematic in some situations.
This is basically when you have so many late payments on a debt that the lender says “F*** it” I’m done pestering this person - I’m going to sell the debt for chump change to a collection agency. This crushes your credit score and really hurts your situation when you’re applying for a line of credit.
This is self explanatory... Stop going on spending sprees.
Inquires is a goofy one because there’s a lot of wrong info about these. Basically when a lender hard pulls your credit it MAY impact your score by about 1 to 3 points. But you have to have lots of lenders pulling your credit for it significantly impact your scores. So unless you’re going car shopping and you have 10 dealerships pull your credit… you’re fine. 1 or 2 inquiries over the last 12 months is not a big deal at all.
Then lastly, Judgements and Tax Liens. These suckers are tough. Hard to get rid of but necessary to getting good credit.
Now most of this stuff won’t just “go away”. You need to actually do something for it to disappear because late payments and major delinquencies will stay on your report for years and years. Now once we get something off your report, it’ll take effect and impact your scores next time they report… which they report every 30 days.
So taking care of everything this month, could potentially boost your scores 150 points by next month.
The craziest situation that I’ve seen is 162 points in 30 days. So it IS possible… you just need to take action.
Look at your credit report and identify what specifically applies to you and then let’s take one bite at a time as we tackle it.
The BEST thing you could do is to just make your payment. The biggest factor of your credit score is your ability to make your payments on time. So if you see late payments on there, then that’s a big problem. Don’t let a 30-day late go to a 60-day or a 90-day.
Make the payment.
You can also negotiate your debt with whoever the lender is. They’d rather get some money then none at all. So negotiate with them. Tell them you want your account to be current without any lates. Ask them what you need to do on your end for them to make that happen. Sometimes it’s just paying down a balance or paying a fee. Each lender and each debt is different.
Your last resort with late payments would be to dispute anything you see on your report that is an error. I’m not telling you to lie just to get out of a late payment but if something was done my mistake… let them know and tell them to fix it. For example, if you made your payment on the 29th day after the due date and they counted it as a 30 day late. Politely dispute it and tell them to fix it. If there are any errors that the company can’t prove, they are required to remove it.
A foreclosure should hop off your credit report 7 years after the date of when your home was fully deeded out of your name. Now if it has been 7 years and it’s still on your report, you can politely contact the credit bureaus and have them remove it (Experian, Equifax, and Transunion).
Pretty simple process. Go to their websites to learn how to do that.
When it comes to a bankruptcy those are the same. A Chapter 7 bankruptcy takes 10 years to be deleted and a chapter 10 bankruptcy takes 7… goofy I know.
Not much you can do about foreclosures and bankruptcies if you haven’t been through those waiting periods. But if you have, make sure you contact the bureaus and get them removed.
This is my favorite thing to tackle because of how easy these can be to get removed and how much they can boost your scores immediately.
Collections are usually at the bottom of your report. So go down there and if you see ANY collections that are Medical collections… we’re in business. These are easy.
Because 9/10 times a medical practice will sell your booty to collections, but problem is… that’s a HIPPA violation. You can’t share any medical information with 3rd parties. So if you see medical, all you have to do is contact the collection agency who holds the debt and tell them in writing that this is a HIPPA violation and they’ll almost immediately delete the collection.
Now if the actual medical practice who you didn’t pay is holding your collection…. Then you’re kind of screwed because it’s not a HIPPA violation and then it gets treated like any other debt in collections.
So any debt in collections that is NOT medical… it needs to be treated carefully. If it’s a small debt, then just pay the collection and get it out of collections. If it’s a BIG debt… then negotiate with the collection agency and tell them that you just don’t have that kind of money, but you’re willing to pay some of it if they’re willing to delete it.
BUT YOU HAVE TO MAKE SURE YOU GET WHAT THEY SAY IN WRITING.
If they say they’ll delete it if you pay half (or whatever), then make sure it’s via email or snail mail or something in writing.
And they will negotiate - believe me. A $10,000 debt of yours could have been bought by them for $500 so anything over what they paid for it means profit for them… Keep that in mind.
Definitely tackle all of your collections ASAP. Send emails, make calls, send letters if you have to. All the contact info of every lender on your credit report will be on the credit report.
This one is easy. You should only have a 30% utilization on each card. I talk about this all the time but if your max balance is $1,000 then you do NOT want to have an outstanding balance more than $300. This is SUPER important.
If you have maxed out credit cards… then pay those suckers down immediately and you’ll see your scores soar immediately. Simple enough.
Something not as simple... are the inquires. Remember if you have a couple it’s no big deal and you should just ignore them because it’s not worth your time.
But if you have 5+ inquiries then it’s probably worth trying to get them removed. You can contact each lender who pulled your credit and tell them that you did not authorize that credit pull. Now unless you signed something or checked a box saying they can pull your credit… you’ll win every time.
If you did sign something or checked a box allowing them to pull it… you’re basically screwed and you’ll just have to wait 12 months for them to disappear on your report.
Bottom line with these: Just don’t have everyone and their mother pull your credit.
These are probably the absolutely hardest to get removed.
Tax Liens: Not so bad anymore because apparently as of April of 2018 they are no longer on credit reports if they are paid. If they aren’t paid then they’ll still show up until paid… but once paid it should be fairly easy to get removed.
Now when it comes to Judgements: You can pay it. Or at the very least, you can get the judgement into "vacated status" filed with the court. Once that's done, you should be able to contact each of the credit bureaus to have it removed.
If you want good credit, it starts with you. Credit scores exist for a reason. They determine your credit worthiness.So stop overspending and start learning more about credit so you can NOT be part of the 30% of people with bad credit.
Also if you want to learn more about qualifying for a mortgage.. again I’m a mortgage lender in Arizona so go to lending.shawnmalkou.com to learn more.
But that’s how to get massive improvements on your credit report as soon as possible. Start working on it TODAY and you’ll see some crazy results in as little as a few weeks.
What are you currently doing to increase your credit score? I'd love to know!
Hi, I'm Shawn Malkou. I'm determined to help you succeed. My question is, are you ready?Let's Do It
He is the shawn-of-all-trades. Starting his entrepreneurship journey at the age of 14 with a dream and a single YouTube channel, he’s then since broken into countless industries. As the founder of Dream2Succeed, co-founder of DishTheDeal, co-founder of DirectionDesk, and lover of all things media – Shawn prides himself in picking up a new skill quickly to then share with others.Learn More
Hi, I'm Shawn Malkou. I'm determined to help you succeed. My question is, are you ready?Let's Do It