Credit Restoration Strategies

When most people think about credit repair and credit restoration, they think about disputing accounts with each of the three credit bureaus. This is certainly a critical part of cleaning up your credit report, but the reality is that it is just a beginning. There are many other things that you can do to improve your credit score. Let's look at just a few.

1. Pay for Delete
If you have collection accounts, whether recent or old, one of the best things that you can do is get a pay for delete agreement in place. This is basically where you and the lender enter into an agreement where in exchange for a payment of the entire balance on your account, they agreed to delete the account from the three credit reports. In some instances, you can negotiate an agreement where the account remains on your credit report but all negative information associated with it is deleted. This is obviously the best case scenario because you then have an account on your credit with a positive credit history.

2. 623 Method
One powerful method of credit restoration is to use what is known as the 623 method. This is where you require the original creditor to investigate your account. If your account when in to collections, there is a good chance that the original creditor does not have easy access to your account information. This method is especially effective in dealing with accounts that have been sold or transferred. While it is quite surprising, the reality is that many creditors have not kept good records and will not be able to verify the details of specific late payments. Unless they can verify this, they must remove the account from your credit report.

3. Settling the Debt
When most people think of credit card debt settlement, they think about settling the debt for 40% of what they owe and having the account marked as settled on the credit bureau. Unfortunately, when debt settlement is handled this way it results in a serious ding to your credit score. If you can, offer to pay more, say 80% in exchange for the account being removed from your credit file. The lender is not as likely to agree to this as they are a pay for delete, but in today's economic times it is certainly worth a try.

Hopefully you can see that there are many ways other than just credit report disputing to restore credit.

Vincent Polisi is the founder of Finance the Dream and Credit Repair College. To learn more about credit restoration, or to view rent to own homes listings please visit us on the web.